Prepare a Statement of Cash Flows, Indirect Method. Glenbrook Companys most recent balance sheet, income statement, and other important information for 2020 are presented as follows.

Additional data for 2020 are as follows:

• Sold equipment with a book value of $30,000 (= $40,000 cost $10,000 accumulated depreciation) for $28,000 cash
• Purchased equipment for $96,000 cash
• There were no sales of long-term investments (Hint: Solve for the purchase of long-term investments.)
• Issued bonds for $16,000 cash
• Repurchased common stock (treasury shares) for $45,000 cash
• Declared and paid $12,000 in cash dividends

Required:

1. Prepare a statement of cash flows for the year ended December 31, 2020, using the indirect method.
2. Briefly describe the major changes in cash identified in the statement of cash flows.

Glenbrook Company Income Statement for the Year Ended December 31, 2020