SANDHILL INC. Income Statement Year Ended December 31, 2021 Sales $654,000 Cost of goods sold 432,000 Gross profit 222.000 Operating expenses $147,500 Loss on sale of equipment 3,000 150.500 Profit from operations 71.500 Interest expense 3.000 Interest revenue (4,500) (1,500) Profit before income tax 73.000 Income tax expense 14,000 Profit $59.000 Additional information: 1. Cash dividends of $15.000 were declared. 2. A long-term investment was acquired for cash at a cost of $101.500. 3. Depreciation expense is included in the operating expenses. 4. The company issued 10,500 common shares for cash on March 2, 2021. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment. Equipment that originally cost $30,000 was sold during the year for cash. The equipment had a carrying value of $9.000 at the time of 5. sale. 6. The company issued a note payable for $28,000 and repaid $3,000 by year end. 6. The company issued a note payable for $28,000 and repaid $3,000 by year end, 7. All purchases of inventory are on credit. 8. Accounts Payable is used only to record purchases of inventory. Prepare a cash flow statement for the year using the indirect method. (Show amounts that decrease cash flow with either a - signes. -15,000 or in parenthesis es. (15,000) SANDHILL INC Cash Flow Statement - Indirect Method Adjustments to reconcile profit to $ Presented below is the comparative balance sheet for Sandhill Inc, a private company reporting under ASPE at December 31, 2021, and 2020 SANDHILL INC. Balance Sheet December 31 Assets 2021 Cash $58,000 Accounts receivable 101.000 Inventory 205.000 Long-term investment 101.500 Property, plant, and equipment 535.000 Less: Accumulated depreciation (162.500) $838.000 Liabilities and Shareholders' Equity Accounts payable $57.500 Dividends payable 6,000 Income tax payable 14,000 Long-term notes payable 25,000 Common shares 630,000 Retained earnings 105,500 $838.000 2020 $98,000 75.000 155,500 0 460,000 (140,000) $648,500 $47.000 0 15.000 0 525.000 61.500 5648.500 SANDHILLINC