P23-2 (LO2,4) SCFIndirect MethodThe comparative balance sheets for Hinckley Corporation show the following information.December 3120202019Cash$33,500$13,000Accounts receivable12,25010,000Inventory12,0009,000Available-for-sales debt investments-3,000Buildings-29,750Equipment45,00020,000Patents5,0006,250Totals$107,750$91,000Allowance for doubtful accounts$3,000$4,500Accumulated depreciation - equipment2,0004,500Accumulated depreciation - buildings-6,000Accounts payable5,0003,000Dividends payable-5,000Notes payable, short-term (nontrade)3,0004,000Long-term notes payable31,00025,000Common stock43,00033,000Retained earnings20,7506,000Totals$107,750$91,000Additional data related to 2020 are as follows:1.Equipment was sold.Selling price of equipment$2,500Portion depreciated at time of sale40%Cost of equipment sold$11,0002.Portion of long-term note payable paid by issuing common stock.$10,0003.Cash dividends paid$5,0004.On January 1, 2020, the building was completely destroyed by a flood.

Insurance proceeds received (net of tax)$30,000Amount of taxes deducted from proceeds2,0005.Investments (available-for-sale) were sold.Sales price above cost$1,700The company has made similar sales and investments in the past.6.Cash of was paid for the acquisition of equipment.7.Long-term note was issued for the acquisition of equipment.$16,0008.Amounts paid in cashInterest$2,000Income taxes6,500

Instructions:Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country.