The balance sheets of Dolan Company for December 31, Year 2 and Year 1, are as follows: Year 2 Year 1 Cash $68,000 $42,500 Accounts receivable (net) 61,000 70,200 Inventories 121,000 105,000 Investments 100,000 Equipment 515,000 425,000 Accumulated depreciation-equipment (153,000) (175,000) $612,000 $567,700 Accounts payable $59,750 $47,250 Bonds payable, due Year 2 75,000 Common stock, $20 par 375,000 325,000 Premium on common stock 50,000 25,000 Retained earnings 127,250 95,450 $612,000 $567,700 Additional information: a. Net income of $71,800 b. Depreciation reported on income statement of $38,000 c. Fully depreciated equipment costing $60,000 was scrapped with no salvage, and equipment was purchased for $150,000. d. Bonds payable for $75,000 were retired by payment at their face amount. e. 2,500 shares of common stock were issued at $30 for cash. f. Cash dividends of $40,000 were declared and paid. 9. Investments of $100,000 were sold for $125,000. Required: Prepare a statement of cash flows using the indirect method. Amounts to be subtracted should be indicated by a minus sign. Dolan Company Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Net income Add (deduct) adjusting items: Depreciation Decrease in accounts receivable X Increase in accounts payable Increase in inventories Gain on sale of investments Net operating cash x Additional information: a. Net income of $71,800 b. Depreciation reported on income statement of $38,000 C. Fully depreciated equipment costing $60,000 was scrapped with no salvage, and equipment was purchased for $150,000. d. Bonds payable for $75,000 were retired by payment at their face amount. e. 2,500 shares of common stock were issued at $30 for cash. f. Cash dividends of $40,000 were declared and paid. g. Investments of $100,000 were sold for $125,000. Required: Prepare statement of cash flows using the indirect method. Amounts to be subtracted should be indicated by a minus sign. Dolan Company Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Net income Add (deduct) adjusting items: Depreciation Decrease in accounts receivable Increase in accounts payable Increase in inventories Gain on sale of investments X Net operating cash Cash flows from investing activities: Sale of investments Purchase of equipment Net cash from investing activities Cash flows from financing activities: Sale of common stock S X Retired bonds payable Payment of dividends Net cash from financing activities Increase in cash $ Cash at the beginning of the year Cash at the end of the year $ Check My Wod