Exercise 23-14 Your answer is partially correct. Try again. Oriole Inc., a greeting card company, had the following statements prepared as of December 31, 2020. ORIOLE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $6,900 Accounts receivable 61,900 50,500 Short-term debt investments (available-for-sale) 34,800 18,200 Inventory 39,900 59,800 Prepaid rent 4,900 4,000 Equipment 155,500 131,200 Accumulated depreciation-equipment (34,800 ) (25,300 ) Copyrights 45,700 50,200 Total assets $314,000 $295,500 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,200 4,000 7,900 7,900 59,800 100,000 30,000 58,200 $314,000 $39,700 6,100 4,000 10,000 68,600 100,000 30,000 37,100 $295,500 ORIOLE INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,400 Gain on sale of equipment 2,000 Income before tax Income tax expense Net income $335,575 173,200 162,375 119,100 43,275 9,400 33,875 6,775 $27,100 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2020. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2020. 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).) ORIOLE INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income 27,100 Adjustments to reconcile net income to Net Cash Provided by Operating Activities v Depreciation Expense 23570 Amortization of Copyright 4500 Gain on Sale of Equipment -2000 Increase in Accounts Receivable -11400 Decrease in Inventories 19900 Increase in Prepaid Rent -900 Increase in Accounts Payable 6500 Increase in Salaries and Wages Payable 3900 Decrease in Income Taxes Payable -2100 =XX Net Cash Provided by Operating Activities v 50370 Cash Flows from Investing Activities Sale of Equipment 8030 Purchase of Equipment -44,400 Sale of Available-for-Sale Investments Net Cash Used by Financing Activities -36370 Cash Flows from Financing Activities Principal Payment on Short-term Loan -6000 Principal Payment on Long-term Loan -8800 Dividend Payments Net Cash Provided by Financing Activities 14800 Net Decrease in Cash -800 Cash at Beginning of Period 6900 Cash at End of Period 6100 $U