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
	2021			2020
Assets
Cash	$	9,500		$	17,500
Short-term investments		53,500			26,500
Accounts receivable		70,500			28,000
Inventories, at cost		55,000			40,500
Prepaid expenses		4,500			7,000
Land		47,000			72,500
Property, plant, and equipment, net		282,000			181,500
Intangible assets		24,500			29,000
	$	546,500		$	402,500
Liabilities and Shareholders Equity
Accounts payable	$	17,500		$	41,000
Income tax payable		7,000			1,500
Accrued liabilities		10,500			-0-
Long-term notes payable		115,000			160,000
Contributed capital		210,000			62,500
Retained earnings		186,500			137,500
	$	546,500		$	402,500

MIKOS INC.
Statement of Earnings
For the Year Ended December 31, 2021
Sales				$	865,000
Cost of sales	$	435,000
Amortization expenseintangible assets		4,500
Depreciation expenseproperty, plant, and equipment		33,500
Operating expenses		226,000
Interest expense		12,500			711,500
Earnings before income taxes					153,500
Income tax expense					46,050
Net earnings				$	107,450

Additional information is as follows:

1. Land was sold for cash at its carrying amount.
2. The short-term investments will mature in February 2022.
3. Cash dividends were declared and paid in 2021.
4. New equipment with a cost of $166,500 was purchased for cash, and old equipment was sold at its carrying amount.
5. Long-term notes of $12,500 were paid in cash, and notes of $32,500 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.)