Statement of Cash Flows (Indirect Method) Use the following information regarding the Fremantle Corporation to prepare a statement of cash flows using the indirect method Accounts payable increase Accounts receivable increase Accrued liabilities decrease Amortization expense Cash balance, January 1 Cash balance, December 31 Cash paid as dividends Cash paid to purchase land Cash paid to retire bonds payable at par Cash received from issuance of common stock 75,000 Cash received from sale of equipment Depreciation expense Gain on sale of equipment Inventory decrease Net income Prepaid expenses increase $14,000 4,000 5,000 26,000 21,000 108,000 49,000 103,000 70,000 17,000 65,000 14,000 11,000 126,000 2,000 FREMANTLE CORPORATION Statement of Cash Flows For Year Ended December 31 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Amortization Gain on Sale of Equipment Accounts Receivable Increase Inventory Decrease Prepaid Expenses Increase Accounts Payable Increase Accrued Liabilities Decrease Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Equipment Purchase of Land Cash Used by Investing Activities Cash Flow from Financing Activities ssuance of Common Stock Retirement of Bonds Payable Payment of Dividends Cash Used by Financing Activities Net Increase in Cash Cash at Beginning of Year Cash at End of Year