Current Attempt in Progress Comparative balance sheet accounts of Sage Inc. are presented below. SAGE INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $41,900 $33,600 Accounts Receivable 70,600 60,500 Inventory 29,900 24,000 Equity investments 22,100 38,800 Machinery 30,300 18,700 Buildings 66,900 56,500 Land 7,600 7,600 $269,300 $239,700 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation-Machinery 5,600 2,200 Accumulated Depreciation-Buildings 13,700 9,000 Accounts Payable 35,300 24,700 Accrued Payables 3,400 2,600 Long-Term Notes Payable 20,800 31,200 Common Stock, no-par 150,000 125,000 Retained Earnings 38,300 43,500 $269,300 $239,700 Additional data (ignoring taxes): 1. Net income for the year was $40,700. 2. Cash dividends declared and paid during the year were $20,900. 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 $24,900 were sold during the year for $28,600. 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. Sage's 2020 income statement follows (ignoring taxes). Sales revenue $535,200 Less: Cost of goods sold 377,900 Gross margin 157,300 Less: Operating expenses (includes $8,850 depreciation and $5,817 bad debts) 119,500 Income from operations 37,800 Other: Gain on sale of investments $3,700 Loss on sale of machinery (800) 2,900 Net income $40,700 (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).) SAGE INC. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to $ . - $ A 4 A A