Prepare the Statement of cash flows of Boston industries for the year ended December 31, 2021. Present cash flows from operating activities by the Direct Method.

Problem 4 (20 points) Comparative balance sheets for 2021 and 2020 and an income statement for 2021 are provided below for Boston Industries. Additional information from the accounting records of Boston is provided. Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands) 2021 2020 Assets: Cash Accounts receivable Inventory Prepaid Insurance Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation Patent $ 1,800 1,800 2,700 30 2,025 2,700 (900) 8,550 (1,575) 3,600 $20,730 $ 1,125 1,350 1,575 10 1,800 2,700 (810) 6,750 (1,440) 4,500 $17,560 $ 2,280 900 $ 1,360 675 0 450 Liabilities: Accounts payable Accrued operating expenses payable Note Payable - land Shareholders' Equity: Common stock Paid-in capital excess of par Retained earnings 9,450 2,250 5,400 $20,730 9,000 2,025 4,500 $17,560 $8,205 Income Statement For year ended December 31, 2021 (S in thousands) Revenues: Sales revenue $7,935 Gain on sale of land 270 Expenses: Cost of goods sold $1,800 Depreciation expense-building 90 Depreciation expense-equipment 945 Loss on sale of equipment 45 Amortization of patent 900 Insurance expense 50 Operating expenses 1,450 Net income 5,280 $2,925 Additional information from the accounting records: a. During 2021, equipment with a cost of $900,000 (related accumulated depreciation is $810,000) was sold. b. The Retained Earnings account reveals reductions of $675,000 and $1,350,000 for stock dividends and cash dividends, respectively. c. During 2021, land of $450,000 was purchased and a note payable of $450,000 was issued