Martinez Inc., a greeting card company, had the following statements prepared as of December 31, 2020. Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable $46,0004,0008,1008,10059,900$39,7005,9004,10010,10068,600 Long-term loans payable Common stock, \$10 par 100,000100,000 Contributed capital, common stock Retained earnings Total liabilities \& stockholders' equity \begin{tabular}{rcc} 30,000 & & 30,000 \\ 55,700 & & 36,900 \\ \cline { 1 } \cline { 3 }$311,800 & & $295,300 \\ \hline \end{tabular} MARTINEZ INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue $333,125 Cost of goods sold Gross profit 159,525173,600 Operating expenses Operating income 40,625118,900 Interest expense $11,500 Gain on sale of equipment Income before tax 31,1252,000 Income tax expense Net income $24,900 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable $46,0004,0008,1008,10059,900$39,7005,9004,10010,10068,600 Long-term loans payable Common stock, \$10 par 100,000100,000 Contributed capital, common stock Retained earnings Total liabilities \& stockholders' equity \begin{tabular}{rcc} 30,000 & & 30,000 \\ 55,700 & & 36,900 \\ \cline { 1 } \cline { 3 }$311,800 & & $295,300 \\ \hline \end{tabular} Additional information: 1. Dividends in the amount of $6,100 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 $19,800 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). MARTINEZ INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income $ 24900 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense $ Gain on Sale of Equipment 2000 Increase in Accounts Receivable 11100 \begin{tabular}{||c|c|} \hline \hline Borrowing on Short-Term Loan & \\ \hline \hline \end{tabular} \begin{tabular}{||c||} \hline \hline17400 \\ \hline \hline \end{tabular} Decrease in Inventories 19600 Increase in Prepaid Rent 900 Decrease in Inventories 19600 Increase in Prepaid Rent \begin{tabular}{|r|} \hline900 \\ \hline \end{tabular} \begin{tabular}{l} Increase in Accounts Payable \\ \hline Decrease in Salaries and Wages Pavable \\ \hline \hline \end{tabular} 6300 \begin{tabular}{|r|} \hline 4000 \\ \hline \end{tabular} \begin{tabular}{||c||} \hline \hline 48260 \\ \hline \end{tabular} Question 12 of 12 1.36/4 \begin{tabular}{|r||} \hline \multicolumn{1}{|c|}{} \\ \hline \hline \end{tabular}