Do It! Review 17-02 b Alex Company reported the following information for 2020. Alex Company Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Totals 2020 2019 $59,000 $36,000 62,000 22,000 44,000 -0- 6,000 4,000 55,000 70,000 200,000 200,000 (21,000) (14,000) 183,000 68,000 (28,000) (10,000) $560,000 $376,000 Change Increase/Decrease $23,000 Increase 40,000 Increase 44,000 Increase 2,000 Increase 15,000 Decrease -0- 7,000 Increase 115,000 Increase 18,000 Increase Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock ($1 par) Retained earnings Totals $43,000 $40,000 -0- 10,000 100,000 150,000 230,000 60,000 187,000 116,000 $560,000 $376,000 $3,000 Increase 10,000 Decrease 50,000 Decrease 170,000 Increase 71,000 Increase Alex Comnany Alex Company Income Statement For the Year Ended December 31, 2020 Sales revenue $941,000 Cost of goods sold $475,000 Operating expenses 231,000 Interest expense 12,000 Loss on disposal of plant assets 2,000 720,000 Income before income taxes 221,000 Income tax expense 65,000 Net income $156,000 Additional information: 1. 2. 3. Operating expenses include depreciation expense of $40,000. Land was sold at its book value for cash. Cash dividends of $85,000 were declared and paid in 2020. Equipment with a cost of $166,000 was purchased for cash. Equipment with a cost of $51,000 and a book value of $36,000 was sold for $34,000 cash. Bonds of $50,000 were redeemed at their face value for cash. Common stock ($1 par) of $170,000 was issued for cash. 4. 5. 6. Use this information to 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).) Use this information to Prepare a statement of cash flows using the indirect method. (Show amounts ALEX COMPANY Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2020 Cash Flows from Operating Activities 156,000 Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 40,000 Loss on Disposal of Plant Assets 2,000 Increase in Accounts Receivable > -40,000 Increase in Inventory Sale of Common Stock Payment of Dividends