Problem 1 (25 points). Attached are the comparative balance sheets for Potawatami Corporation. Additional information related to 20X3 is provided below. (1) Equipment that originally cost $30,000 and was 60% depreciated at the time of disposal was sold for $12.500. (2) $25,000 of the long term note payable was paid by issuing common stock (3) On January 1, 20X3, a building was sold for $70,000. The accumulated depreciation on the building at the time of sale was $10,000. There were no other purchases or sales of building during the period. (4) Long term investments were sold at $3,000 above their cost. There were no purchases of investments during the period. (5) A long term note was issued in the amount of $26,000 for the purchase of equipment. The company also made additional borrowings using long term notes during the year. (6) All other purchases of equipment were made in cash. There were no purchases or disposals of patents during the period. (7) The company declared dividends of $12,000, which were paid during the year along with the dividends that were payable at the beginning of the year. All other changes to the retained earnings account were due to net income for the period. REQUIRED: Prepare a Statement of Cash Flows for the company for the year ended December 31. 20X3, using the indirect method. Be sure to include a schedule of noncash investing and financing activities. POTAWATAMI CORPORATION COMPARATIVE BALANCE SHEETS AT DECEMBER 31, 20X2 AND 20X3 Dec. 31, 20x3 Dec. 31, 20X2 Cash S 28,500S 20.000 Accounts Receivable 14,300 10.000 Inventory 18,000 25.000 Long Term Investments 6,000 Building 20,000 50.000 Accumulated Depreciation, Building ( 1,000) ( 6,000) Equipment 72,000 Accumulated Depreciation, Equipment ( 14,000) ( 22,500) Patent 14,600 15,750 TOTAL ASSETS $ 152,400 $ 133,250 $ Accounts Payable Dividends Payable Notes Payable, Short Term Notes Payable, Long Term Common Stock Additional Paid In Capital, Common Stock Retained Earnings TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 12,000 0 8,000 42,000 50,000 10,000 30,400 15,000 10,000 2,000 36,000 35,000 35,250 S 152,400S 133,250