E5.14 (LO 8, 9) (Preparation of Statement of Cash Flows) A comparative statement of financial position for Carmichael Industries Inc. follows:

Carmichael Industries Inc. Statement of Financial Position December 31, 2020 December 31 Assets 2020 2019 Cash $ 21,000 $ 34,000 Accounts receivable 104,000 54,000 Inventory 220,000 189,000 Land 71,000 110,000 Equipment 260,000 200,000 Accumulated depreciationequipment (69,000) (42,000) Total $607,000 $545,000 Liabilities and Shareholders' Equity Accounts payable $ 52,000 $ 59,000 Bonds payable 150,000 200,000 Common shares 214,000 164,000 Retained earnings 191,000 122,000 Total $607,000 $545,000 Additional information:

1. Net income for the fiscal year ending December 31, 2020, was $129,000. 2. Cash dividends of $60,000 were declared and paid. Dividends paid are treated as financing activities. 3. Bonds payable amounting to $50,000 were retired through issuance of common shares. 4. Land was sold at a gain of $5,000. 5. No equipment was sold during the year. Instructions a. Prepare a statement of cash flows using the indirect method along with any necessary note disclosure.

b. Comment in general on the results reported in the statement of cash flows.