Lawrence Inc. Income Statement For Year Ended December 31, 2020 ($ in 000s) Revenues and Gains Sales Revenue Less: Cost of Goods Sold Gross Profit Less: Operating Expenses Income from Operations Other Revenues and Gains Gain on Sale of Land Other Expense and Losses Loss on Sale of Equipment Net Income $10,580 2,400 $8.180 4.580 $3,600 360 (60) $3.900 Additional information from the accounting records: 1. Depreciation Expense and Amortization Expense are included in Operating Expenses. 2. During 2020, signed a Note Payable in exchange for Land. 3. During 2020, equipment with a cost of $1,200,000 (90% depreciated) was sold. 4. The statement of retained earnings reveals reductions for both stock and cash dividends. The stock dividends were $900.000. Instructions: 1. Prepare the Statement of Cash Flows using the direct method. 2. Prepare the Operating Activities Section of the Statement of Cash flows using the indirect method. II. Cash Flow Problem Lawrence Inc.'s Comparative Balance Sheets for 2020 and 2019 and Income Statement for 2020 are presented below. Lawrence Inc. Comparative Balance Sheets December 31, 2020 and 2019 ($ in 000s) Assets Cash Accounts Receivable Inventory Land Building Less: Accum. Depreciation Equipment Less: Accum. Depreciation Patent 2020 $2,400 2,400 3,600 2,700 3,600 (1,200) 11,400 (2.100) 4,800 $27.600 2019 $1,500 1,800 2.100 2.400 3,600 (1,080) 9,000 (1,920) 6,000 $23.400 Liabilities Accounts Payable Accrued Expenses Payable Note PayableLand Stockholders' Equity Common Stock Retained Earnings $ 3,000 1.200 600 S 1,800 900 0 15,600 7.200 $27.600 14,700 6,000 $23.400