Statement of cash flows for Bernard Corp. is presented below:

BERNARD CORP.

Statement of Cash Flows (indirect method)

Year ended December 31, 2020

Cash provided by operating activities

Net income $ 150,000

Add back non-cash expenses: Increase in accounts receivable $ (24,000)

Increase in accounts payable 32,000

Depreciation expense 60,000

Gain on disposal of equipment (14,000)

Amortization of patents 8,000

Cash provided by operating activities 212,000

Cash provided by (used in) investing activities

Sale of equipment 48,000

Purchase of land (100,000)

Purchase of buildings and equipment (192,000)

Cash used by investing activities (244,000)

Cash provided by financing activities

Payment of cash dividends (60,000)

Issuance of common shares 160,000

Cash provided by financing activities 100,000

Net increase in cash 68,000

Cash, January 1, 2020 160,000

Cash, December 31, 2020 $ 228,000

Instructions

1. Summarize Bernards cash flows of 2020: what was the main source of cash and was the main use of the cash during 2020?

2. Why was depreciation expense of $60,000 added to determine cash from operating activities? Could Bernard increase its cash from operating activities by increasing its depreciation. Why or why not? Explain briefly but clearly.

3. Bernard sold some equipment during 2020. What was the carrying value of the equipment sold? (Show your work)