Comparative balance sheet accounts of Sheridan Inc. are presented below. SHERIDAN INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $42,200 $33,400 Accounts Receivable 70,100 59,900 Inventory 30,000 24,300 Equity investments 22,400 38,200 Machinery 29,800 18,800 Buildings 67,200 56,300 Land 7,500 7,500 $269,200 $238,400 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings $2,300 $1,600 5,700 2,200 13,300 9,000 34,700 24,700 3,300 2,600 21,100 30,900 150,000 125,000 38,800 42,400 $269,200 $238,400 Additional data (ignoring taxes): 1. Net income for the year was $42,700. 2. Cash dividends declared and paid during the year were $21,300. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $24,800 were sold during the year for $28,500. No unrealized gains and losses were recorded on these investments in 2020. 5. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250. Sheridan's 2020 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,550 depreciation and $5,926 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $539,300 378,300 161,000 121,200 39,800 $3,700 (800) 2,900 $42,700 (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) Prepare 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).) (b) Prepare 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).) SHERIDAN INC. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to