Prepare a statement of cash flows using the indirect method

Your answer is partially correct. The comparative unclassified statement of financial position for Sandhill Ltd. follows: 2020 SANDHILLLTD. Statement of Financial Position December 31 Assets 2021 Cash $59,000 Accounts receivable 90,000 Inventory 175,000 Estimated inventory returns 9,000 Long-term investments 75,000 Equipment 275,000 Accumulated depreciation (76.000) Total assets $607,000 $22,000 80,500 182,500 7,000 140,000 162,000 (35,000) $559,000 Liabilities and Shareholders' Equity Accounts payable Refund liability Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders' equity $30,000 6,000 161,000 205,000 205,000 $607,000 $ 43,000 5,000 202,000 172,000 137,000 $559,000 Additional information pertaining to 2021: 1. Net income was $110,100. Sales were $974,000. 2. 3. 4. 5. 6. 7. Cost of goods sold was $750,000. Operating expenses were $40,000, exclusive of depreciation expense. Depreciation expense was $41,000. Interest expense was $12,000. Income tax expense was $26,000. Long-term investments were sold at a gain of $5,100. No equipment was sold during the year. $41,000 of the bank loan was repaid during the year. Common shares were issued for $33,000. 8. 9. 10. 11. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g. -45,000, or in parenthesis e.g. (45,000).) SANDHILL LTD. Statement of Cash Flows-Indirect Method Year Ended December 31, 2021 Cash flows from operating activities $ 110,100 Net income Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense 65000 Increase in estimated inventory returns -2000 Increase in accounts receivable -9500 Decrease in refund liability Decrease in inventory TA - 134500 Decrease in refund liability > 5,100. Net cash used by investing activities Cash flows from financing activities Payment of cash dividends $ 33,000 Net cash used by financing activities Net increase in cash > Cash, January 1 Cash, December 31 $ >