Problem 21. The Sage Corporation prepared, for 2012 and 2011, the following balance sheet data:

	2012	2011
Cash	$87,375	$63,750
Available-for-sale securities(not cash Equivalents)	$17,250	$105,000
Accounts Receivable	$90,000	$86,250
Merchanddise Inventory	$187,500	$163,500
Prepaid Insurance	$1,125	$1,500
Land, Buildings, and equipment	$1,378,875	$1,087,500
Accumulated Depreciation	$(558,750)	$(498,750)
Total	$1,203,375	$1,008,750
Accounts Payable	$ 153,375	$ 236,250
Salaries Payable	18,750	26,250
Notes Payable-- bank (current)	37,500	150,000
Bonds Payable	375,000	0
Common Stock	600,000	600,000
Retained Earnings (deficit)	18,750	(3,750)
Total	$1,203,375	$1,008,750

Additional Information:

(a) Sold available-for-sale securities (not cash equivalents) costing $87,750 for $90,000.

(b) Equipment costing $18,750 with a book value of $3,750 was sold for $4,500.

(c) Issued 8% bonds payable at par, $375,000.

(d) Purchased new equipment for cash, $310,125.

(e) Paid cash dividends of $22,500 during the year.

(f) Net income for 1999 was $45,000.

(g) Proceeds from the notes payable were used for operating purposes.

Prepare a cash flow statement for Sage Corporation for 2012, using the indirect method. To save time use this format :

Sage Corporation

Statement of Cash Flows

For the Year Ended December 31,2012

Cash flows from operating activities:

Net income $

Adjustments:

Gain on sale of available-for-sale securities

Gain on sale of equipment

Depreciation expense

Increase in accounts receivable

Increase in merchandise inventory

Decrease in prepaid insurance

Decrease in accounts payable

Decrease in salaries payable

Decrease in notes payable

Net cash used in operating activities

---------

Cash flows from investing activities:

Sale of available-for-sale securities

Sale of equipment

Purchase of equipment

Net cash used in investing activites

Cash flows from financing activities:

Proceeds from bond issue

Payment of cash dividends

Net cash provided by financing activities

Net increase in cash

Cash at beginning of year

Cash at end of year $