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 $ 9,800 $ 17,800 Short-term investments 58,600 30,400 Accounts receivable 72,000 29,200 Inventories, at cost 55,600 40,800 Prepaid expenses 4,800 7,600 Land 48,200 74,000 Property, plant, and equipment, net 283,200 183,000 Intangible assets 24,800 29,600 5557,000 $412,400 Liabilities and Shareholders' Equity Accounts payable $ 17,800 $ 41,600 Income tax payable 7,600 1,800 Accrued liabilities 18,800 -0- Long-term notes payable 118,000 166,000 Contributed capital 216,000 64,000 Retained earnings 186, 800 139,000 $557,000 $412,400 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 $874,000 $438,000 4,800 33,800 229,000 12,888 718,400 155,600 46,680 $108,920 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 $166,800 was purchased for cash, and old equipment was sold at its carrying amount. e. Long-term notes of $14,000 were paid in cash, and notes of $34,000 were converted to shares. 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