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Please help me with this question. P23.9B (L0 2,4) (Indirect SCF) Thompson Corporation has contracted with you to prepare a statement of cash flows. The

Please help me with this question.

P23.9B (L0 2,4) (Indirect SCF) Thompson Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information:

December 31, December 31,
2020 2019
Cash $39,500 $18,000
Investments 0 15,000
Accounts receivable 51,000 46,000
Inventory 46,000 30,000
Buildings 0 45,000
Equipment 46,000 15,000
Patents 8,000 10,000
Totals $190,500 $179,000
Allowance for doubtful accounts $2,500 $2,000
Accumulated depreciation-buildings 0 15,000
Accumulated depreciation-equipment 12,000 5,000
Accounts payable 26,000 34,000
Dividends payable 6,000 0
Notes payable, short-term, nontrade 6,000 5,000
Long-term notes payable 37,000 40,000
Common stock 56,000 43,000
Retained earnings 45,000 35,000
Totals $190,500 $179,000

Additional data related to 2020 are as follows: 1. Equipment that had cost $5,000 and was 20% depreciated at time of disposal was sold for $2,000. 2. $13,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $10,000. 4. On January 1, 20 , the building was completely destroyed by a typhoon. Insurance proceeds on the building were $42,000 (net of $8,000 taxes). 5. Investments (available-for-sale) were sold at $3,000 below their cost. The company has made similar sales and investments in the past. 6. Cash and long-term note for $10,000 were given for the acquisition of equipment. 7. Interest of $3,000 and income taxes of $9,000 were paid in cash. Instructions (a) Use the indirect method to analyze the above information and prepare a statement of cash flows for Thompson. Typhoon damage is unusual in that part of the country. (b) What would you expect to observe in the operating, investing, and financing sections of a statement of cash flows of: (1) A severely financially troubled firm? (2) A recently formed firm that is experiencing rapid growth?

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