QUESTION 1 Instructions: Prepare a statement of cash flows using the indirect method. Please indicate clearly the following subheading on the statement of cash flow: A. Cash flow from Operations B. Cash flow from Investing C. Cash flow from Financing Below is the comparative balance sheets December 31, 2019 and December31, 2019 Year 2 Year 1 Cash $72,000.00 $42,500.00 Accounts Receivable (net) 61,000.00 70,200.00 Inventories 121,000.00 105,000.00 Investments 100,000.00 Equipment 515,000.00 425,000.00 Accumulated Depreciation-Equipment (153,000.00) (175,000.00) $616,000.00 $567,700.00 Accounts Payable $59,750.00 $47,250.00 Bonds Payable 75,000.00 Common Stock, $20 par 375,000.00 325,000.00 Premium on Common Stock 50,000.00 25,000.00 Please indicate clearly the following subheading on the statement of cash flow: A. Cash flow from Operations B. Cash flow from Investing C. Cash flow from Financing Below is the comparative balance sheets December 31, 2019 and December 31, 2019 Year 2 Year 1 Cash $72,000.00 $42,500.00 Accounts Receivable (net) 61,000.00 70,200.00 Inventories 121,000.00 105,000.00 Investments 100,000.00 Equipment 515,000.00 425,000.00 Accumulated Depreciation Equipment (153,000.00) (175,000.00) $616,000.00 $567,700.00 Accounts Payable $59,750.00 $47,250.00 Bonds Payable 75,000.00 Common Stock, $20 par 375,000.00 325,000.00 Premium on Common Stock 50,000.00 25,000.00 Retained Earnings 131,250.00 95,450.00 $616,000.00 $567,700.00 Question Completion Status: $616,000.00 $567,700.00 Additional data for the current year are as follows: (1) Net incme, $75,800. (2) Depreciation reported on income statement, $38,000 (3) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000 (4) Bonds payable for $75,000 were retired by payment at their face amount. (5) 2,500 shares of common stock were issued at $30 for cash. (6) Cash dividends declared and paid, $40,000. (7) Investments of $100,000 were sold for $125,000