SARASOTA INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,000 $7,100 Accounts receivable 62,000 50,700 Short-term debt investments (available-for-sale) 35,300 17,900 Inventory 40,400 59,600 Prepaid rent 5,100 3,900 Equipment 153,300 131,200 Accumulated depreciation-equipment (35,300 ) (25,100 ) Copyrights 46,000 50,000 Total assets $312,800 $295,300 Accounts payable $46,200 $39,700 Income taxes payable 3,900 6,100 Salaries and wages payable 7,900 4,000 Short-term loans payable 8,000 10,100 Long-term loans payable 59,900 68,300 Common stock, $10 par 100,000 100,000 Contributed capital, common stock 30,000 30,000 Retained earnings 56,900 37,100 Total liabilities & stockholders' equity $312,800 $295,300 SARASOTA INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue Cost of goods sold $334,625 174,300 Gross profit Operating expenses 160,325 118,900 Operating income 41,425 Interest expense $11,300 Gain on sale of equipment 2,000 9,300 Income before tax 32,125 Income tax expense 6,425 Net income $25,700 Additional information: 1. Dividends in the amount of $5,900 were declared and paid during 2020. 2. 3. 4. Depreciation expense and amortization expense are included in operating expenses. No unrealized gains or losses have occurred on the investments during the year. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2020. Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a-sign eg.-15,000 or in parenthesis e.g. (15,000).) SARASOTA INC. Statement of Cash Flows Cash Flows from Operating Activities Cash Received from Customers Cash Payments to Suppliers Cash Payments for Operating Expenses Cash Payments for Interest Cash Payments for Income Taxes Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Purchase of Equipment Purchase of Investments $ Purchase of Equipment Purchase of Investments Net Cash Provided by Investing Activities Cash Flows from Financing Activities Principal Payment on Short-term Loan Principal Payment on Long-term Loan Dividend Payments Net Cash Used by Financing Activities Net Decrease in Cash Cash at Beginning of Period Cash at End of Period $