Condensed financial data of Cheng Inc. follow. CHENG INC. Comparative Balance Sheets December 31 Assets 2020 Cash $112,900 Accounts receivable 92,100 Inventory 112,500 Prepaid expenses 29,200 Investments 140,500 Equipment 264,100 Accumulated depreciation-equipment (46,900) Total $704,400 2019 $47,100 32,000 102,200 25,400 115,000 242,000 (51,800) $511,900 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $111,000 16,000 113,300 220,600 243,500 $704,400 $67,700 17,300 149,400 176,000 101,500 $511,900 CHENG INC. Income Statement For the Year Ended December 31, 2020 Sales revenue $391,000 Less: Cost of goods sold Operating expenses, excluding depreciation Depreciation expense $134,400 12,400 33,400 27,600 4,200 7,500 Income tax expense Interest expense Loss on disposal of plant assets Net income 219,500 $171,500 Additional information: 1. 2. New equipment costing $80,900 was purchased for cash during the year. Old equipment having an original cost of $58,800 was sold for $13,000 cash. Bonds matured and were paid off at face value for cash. A cash dividend of $29,500 was declared and paid during the year. 3. 4. 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).) 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).) CHENG INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income $ Adjustments to reconcile net income to Cash Flows from Operating Activities Depreciation Expense $ Sale of Plant Assets