P12.7 (LO 2, 3), AP Presented here are the financial statements of Warner Company. Warner Company Comparative Balance Sheets December 31 Additional data: 1. Depreciation expense was $17,500. Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Total Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total Warner Company Income Statement Sales revenue Cost of goods sold Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes For the Year Ended December 31, 2025 Income tax expense Net income 2025 2024 $ 35,000 $ 20,000 20,000 14,000 28,000 20,000 60,000 78,000 (32,000) (24,000) $111,000 $108,000 $ 19,000 $ 15,000 7,000 8,000 17,000 33,000 18,000 14,000 50,000 38,000 $111,000 $108,000 $242,000 175,000 67,000 $18,000 6,000 24,000 43,000 3,000 40,000 8,000 2. Dividends declared and paid were $20,000. 3. During the year, equipment was sold for $8,500 cash. This equipment originally cost $18,000 and had accumulated depreciation of $9,500 at the time of sale. 4. Bonds were redeemed at their carrying value. 5. Common stock was issued at par for cash. Instructions a. Prepare a statement of cash flows using the indirect method. Net cash provided-oper. act. $38,500 $ 32,000