Problem 23-06 Comparative balance sheet accounts of Sage Inc. are presented below. SAGE INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $41,600 $33,600 Accounts Receivable 70,400 60,600 Inventory 30,000 24,200 Equity investments 22,100 38,200 Machinery 29,900 18,800 Buildings 67,800 56,900 Land 7,500 7,500 $269,300 $239,800 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated DepreciationMachinery 5,700 2,200 Accumulated DepreciationBuildings 13,700 9,100 Accounts Payable 35,000 25,000 Accrued Payables 3,300 2,600 Long-Term Notes Payable 20,800 31,300 Common Stock, no-par 150,000 125,000 Retained Earnings 38,600 43,100 $269,300 $239,800 Additional data (ignoring taxes): 1. Net income for the year was $41,600. 2. Cash dividends declared and paid during the year were $21,100. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. Equity investments (level of ownership is less than 20%) that cost $24,900 were sold during the year for $28,700. No unrealized gains and losses were recorded on these investments in 2020. 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Sages 2020 income statement follows (ignoring taxes). Sales revenue $541,900 Less: Cost of goods sold 381,900 Gross margin 160,000 Less: Operating expenses (includes $8,850 depreciation and $5,127 bad debts) 121,400 Income from operations 38,600 Other: Gain on sale of investments $3,800 Loss on sale of machinery (800 ) 3,000 Net income $41,600 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities $ (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) SAGE INC. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to $ $ Click if you would like to Show Work for this question: Open Show Work