P5-3 Preparing a Statement of Cash Flows (Indirect Method) LO5-2, 5-7 The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below: MIKOS INC. Comparative Statements of Financial Position December 31 Assets Cash Short-term investments Accounts receivable Inventories, at cost Prepaid expenses Land Property, plant, and equipment, net Intangible assets Liabilities and Shareholders' Equity Accounts payable Income tax payable Accrued liabilities Long-term notes payable Contributed capital Retained earnings 2021 2020 $ 10,500 $ 18,500 70,500 39,500 75,500 32,000 57,000 41,500 5,500 9,000 51,000 77,500 286,000 186,500 25,500 31,000 $581,500 $435,500 $ 18,500 $ 43,000 9,000 11,500 2,500 -0- 125,000 180,000 230,000 67,500 187,500 142,500 $581,500 $435,500 MIKOS INC. Statement of Earnings For the Year Ended December 31, 2021 Sales Cost of sales Amortization expense-intangible assets Depreciation expense-property, plant, and equipment Operating expenses Interest expense Earnings before income taxes Income tax expense Net earnings $895,000 $445,000 5,500 34,500 236,000 13,500 734,500 160,500 48,150 $112,350 Additional information is as follows: a. Land was sold for cash at its carrying amount. b. The short-term investments will mature in February 2022. c. Cash dividends were declared and paid in 2021. d. New equipment with a cost of $167,500 was purchased for cash, and old equipment was sold at its carrying amount. e. Long-term notes of $17,500 were paid in cash, and notes of $37,500 were converted to shares. Required: 1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021 by using the indirect method. (Negative answers should be indicated by a minus sign.) MIKOS INC. Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Adjustments to reconcile net earnings to net cash provided by operating activities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow from financing activities Cash and short-term investments, beginning of year Cash and short-term investments, end of year