G Companys balance sheets as of 12-31-18 and 12-31-19 and its income statement for the year ended 12-31-19 follow:

12-31-18 12-31-19

Cash $1,520,000. $1,990,000

Short term account receivable from customers,net 5,000,000. 5,200,000

Investments in equity securities 1,600,000 2,108,000

Investments in debt securities 0 297,000

Plant assets 4,800,000 6,200,000

Accumulated depreciation (1,300,000) (1,540,000)

Limited-life intangibles 100,000 90,000

Short Term debt 2,150,000 2,724,000

Accrued liabilities 394,766 527,251

Asset retirement obligations 0 48,742

Bonds payables, net 3,915,234 1,967,504

Common stock ($1 par value) 800,000 804,000

Additional paid in capital, common stock 2,925,000 4,883,503

Treasury stock (800,000) (480,000)

Retained Earnings 1,960,000 3,870,000

Total: 11,345,000 14,345,000

Sales $30,000,000

Operating expenses 25,380,000

Other gains/losses, net 71,500

Interest expense 228,000

Income before taxes 4,463,500

Income tax expense 937,500

Net Income $3,526,000

Additional information for G follows:

-Gs investments in equity securities consists of two equity investments:

-One relates to a 2018 purchase of 100,000 shares of Whiting Company common stock. G paid $12 for each share of

Whiting stock. Gs interest in Whiting does NOT allow G to exert any influence over Whiting. As of 12-31-18 and 12-

31-19, one share of Whiting stock was trading for $16 and $15 per share, respectively. Whiting does not pay any kind

of dividend to its shareholders.

-One relates to a 01-01-19 purchase of 80,000 shares of Lowell Company common stock. Throughout 2019, Lowell had 200,000 shares of common stock outstanding. G paid $6 for each share of Lowell stock. As of 12-31-19, one share of Lowell stock was trading for $9 per share. For the year ended 12-31-19, Lowell reported $400,000 of net income. During 2019, Lowell declared and distributed a total of $80,000 of dividends on its common stock outstanding.

-Gs investments in debt securities consist of bonds G purchased 06-30-19 at 98 plus $1,500 of purchase-related costs. The$300,000, 4% bonds were dated 06-30-19 and will mature on 06-30-22. G will receive interest every 12-31 and 06-30. G plans to sell the bonds within the next 12 months. The bonds were trading at 99 on 12-31-19.

-The carrying value of the investment-related accounts includes any required fair value adjustments.

-Gs limited-life intangibles relates to various patents. On 01-01-19, G purchased a patent for $18,000. G estimates it will benefitfrom this patent for six years. G will benefit from the other patents over the next four years.

-During 2019, G sold a machine (plant asset) for $67,000. At the time of the sale, the assets book value was $63,000. G hadpurchased the machine in 2014 for $120,000.

-On 01-01-19. G purchased a machine for $500,000. G started using the machine on 01-01-19. G estimates it will use the machinefor 10 years. At the end of the 10th year, G will have to dispose of the machine at an estimated cost of $65,000. Assume as of 01-01-19 the interest rate on US Treasury securities was 1.25% and Gs credit standing required a 2% risk premium.

-On 12-31-17, G issued $4,000,000 of its 4%, 5-year convertible bonds. The bonds pay interest every 06-30 and 12-31 and mature on 12-31-22. At the time G issued the bonds, similar bonds paid 4.5% interest. At the time of issuance, G incurred and paid $15,000 of bond issuance costs. At any time at the discretion of the bondholder, each bond can be converted into two shares of Gs common stock. On 06-30-19, after receiving their interest checks, 50% of the bondholders exercised the conversion option. This was the first-time bondholders exercised their conversion option. At the time of the conversion, one share of Gs stock was trading for $770 per share.

-During 2018, G purchased 1,000 shares of its common stock paying $800 per share. This was Gs first and only treasury stock transaction during 2018. During 2019, G reissued 400 of these shares and received $770 per share. This was Gs only treasury stock transaction during 2019.

-During 2019, G declared and distributed cash dividends on its outstanding common stock.

- On Gs income statement, the operating expenses caption includes, but is not limited to, depreciation AND amortization AND accretion expenses.

-Gs interest expense reported on its income statement is only on money borrowed on both a short-term and long-term basis.

-On Gs income statement, the Other gains/losses, net caption represents any investment-related income and gains/losses and any gains/losses on fixed asset sales.

-G records adjusting journal entries only once a year as of year-end. Prepare Gs statement of cash flows using the indirect method for the year ended 12-31-19. Label each section amount as cash provided by OR cash used in. Make sure the description of the items within each section are clear.