Comparative balance sheet accounts of Flounder Inc. are presented below.

FLOUNDER INC.

COMPARATIVE BALANCE SHEET ACCOUNTS

AS OF DECEMBER 31, 2020 AND 2019

December 31

Debit Accounts

2020 2019

Cash $42,300 $34,000

Accounts Receivable 70,600 59,600

Inventory 30,000 23,900

Equity investments 22,500 38,700

Machinery 29,700 18,600

Buildings 67,900 56,600

Land 7,500 7,500

$270,500 $238,900

Credit Accounts

Allowance for Doubtful Accounts $2,200 $1,500

Accumulated DepreciationMachinery 5,700 2,300

Accumulated DepreciationBuildings 13,600 8,900

Accounts Payable 34,800 24,500

Accrued Payables 3,300 2,700

Long-Term Notes Payable 21,200 31,200

Common Stock, no-par 150,000 125,000

Retained Earnings 39,700 42,800

$270,500 $238,900

Additional data (ignoring taxes):

1. Net income for the year was $43,100.

2. Cash dividends declared and paid during the year were $21,200.

3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized.

4. Equity investments (level of ownership is less than 20%) that cost $25,000 were sold during the year for $28,700. No unrealized gains and losses were recorded on these investments in 2020.

5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150.

Flounder's 2020 income statement follows (ignoring taxes).

Sales revenue $544,200

Less: Cost of goods sold 383,000

Gross margin 161,200

Less: Operating expenses (includes $8,850 depreciation and $5,733 bad debts) 121,000

Income from operations 40,200

Other: Gain on sale of investments $3,700

Loss on sale of machinery (800)

2,900

Net income $43,100

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Net cash flow from operating activities

$

(b) a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

FLOUNDER INC.

Statement of Cash Flows

(Indirect Method)

$

Adjustments to reconcile net income to

$

$