Question 6 The net changes in the balance sheet accounts of Karen, Inc. for the year 2021 are shown below: Account Debit Credit Cash $ 168,800 Accounts receivable $ 63,200 Allowance for doubtful accounts 10,700 Inventory 196,300 Prepaid expenses 20,200 Long-term investments 146,000 Land 413,000 Buildings 659,000 Machinery 101,000 Office Equipment 30,000 Accumulated depreciation: Buildings 20,500 Machinery 20,200 Office Equipment 13,500 Accounts payable 184,900 Accrued liabilities 73,600 Dividends payable 126,000 Premium on bonds 37,200 Bonds payable 930,000 Preferred stock ($50 par) 72,500 Common stock ($10 par) 157,500 Additional paid-in capital-common 281,500 Retained earnings 67,200 Retained earnings PRINTER VERSION BACK NEXT M 67,200 $1,896,400 $1,896,400 lu olut Boluti Additional information: 1. Net income $157,500 2. Cash dividends of $126,000 were declared December 15, 2021, payable January 15, 2022. A 5% stock dividend was issued March 31, 2021, when the market value was $24 per share. 3. The long-term investments were sold for $138,000. 4. A building and land which cost $519,500 and had a book value of $374,500 were sold for $402,000. The cost of the land, included in the cost and book value above, was $21,000. 5. The following entry was made to record an exchange of an old machine for a new one: Machinery 153,000 Accumulated Depreciation-Machinery 45,000 Machinery 52,000 Cash 146,000 6. A fully depreciated copier machine which cost $30,000 was written off. 7. Preferred stock of $72,500 par value was redeemed for $86,000. 8. The company sold 12,200 shares of its common stock ($10 par) on June 15, 2021 for $29 a share. There were 86,750 shares outstanding on December 31, 2021. 9. Bonds were sold at 104 on December 31, 2021. 10. Land that was condemned had a book value of $245,000. Proceeds received totaled $105,000. Ches olutie Chegy Dronn Prepare a statement of cash flows (indirect method). Ignore tax effects. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Karen, Inc. Statement of Cash Flows For the Year Ended December 31, 2021 Increase (Decrease) in Cash Adjustments to reconcile net income to
