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As the controller of Lynbrook Company, you have been asked to prepare the complete Statement of Cash Flows for the year December 31, 2021. The following financial statements and additional information have been provided to you by your accounting department. Lynbrook's policy is to use the indirect method when presenting the cash flows from operations. Lynbrook Company Balance Sheets At December 31 2021 2020 Assets: Cash $ 85,600 $ 65,200 Accounts receivable, net 72,850 56,750 Merchandise inventory 157,750 144,850 Prepaid expenses 6,080 12,680 | Equipment 280,600 245,600 Accumulated depreciation Equipment (80,600) (97,600 Total assets $522.280 $427,480 Liabilities: Accounts payable Income taxes payable Notes payable (long term) Total liabilities Equity: $ 52,850 15,240 59.200 $127,290 $ 45,450 12.240 79.200 $136,890 Common stock Paid-in capital in excess of par Retained earnings Total equity Total liabilities and equity 200,000 53,000 141,990 $394,990 $522.280 150,000 40,000 100.590 $290,590 $427.480 $488,000 Lynbrook Company Income Statement For the year ending December 31, 2021 Sales Cost of goods sold Depreciation expense Other operating expenses Interest expense Other gains (losses): Gain on sale of equipment Income before taxes Income taxes expense Net income $212,540 43,000 106,260 6,400 (368,200 4.700 124,500 41,100 83.400 S (continued) Additional Information a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit