mework Seved Exercise 11-10B Prepare a statement of cash flows-indirect method (LO11-3, 11-4, 11-5) The balance sheets for a company, along with additional Information are provided below: 2021 2020 $ 116,500 80,400 101,000 5,200 $ 136,800 95,000 85,400 2,600 Balance Sheets December 31, 2021 and 2020 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 510,000 814,000 (434,000) $1,193,100 510,000 700,000 (280,000) $1,249,800 $ $ 105,000 6,900 9,200 90,400 13,800 5,600 115,000 230,000 730,000 227,000 $1,193, 100 730,000 180,000 $1,249,800 Additional Information for 2021: 1. Net income is $75,000. 2. The company purchases $114,000 in equipment. 3. Depreciation expense is $154,000. 2 E! Next Additional Information for 2021: 1. Net income is $75,000. 2. The company purchases $114,000 in equipment 3. Depreciation expense is $154,000. 4. The company repays $115,000 in notes payable. 5. The company declares and pays a cash dividend of $28,000. Required: Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.) Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net income $ 75,000 Adjustments to reconcile net income to net cash flows from operating activities Depreciation expense 154,000 Decrease in accounts receivable Increase in inventory Increase in prepaid rent Increase in accounts payable Decrease in interest payable Increase in income tax payable $ 229,000 Net cash flows from operating activities Cash Flows from Investing Activities Purchase of equipment BR 2 of 3 HILIGADO 11 picparu II Increase in accounts payable Decrease in interest payable Increase in income tax payable $ 229,000 Net cash flows from operating activities Cash Flows from Investing Activities Purchase of equipment 0 Net cash flows from investing activities Cash Flows from Financing Activities Payment of notes payable Payment of cash dividends 0 Net cash flows from financing activities Net decrease in cash Cash at the beginning of the period Cash at the end of the period $ 0