The comparative balance sheet of Nesbit Inc. for December 31, 2020, and 2019 is as follows:

An examination of the accounting records revealed the following additional information applicable to 2020:

1. Land costing $20,000 was sold for $20,000.
2. A mortgage note was issued for $60,000.
3. Investments was sold for cash.
4. A building costing $135,000 was purchased cash.
5. 2,500 shares of common stock were issued in exchange for the bonds payable.
6. Cash dividend declared were $60,000.

Instructions

1. Prepare a statement of cash flows using indirect method of reporting cash flows from operating activities, investing activities, and financing activities.
2. Prepare a statement of cash flows using direct method of reporting cash flows from operating activities only.

Nesbitt Inc. Comparative Balance Sheet December 31, 2020, and 2019 2020 2019 Assets Cash Accounts receivable (net) Inventories Prepaid expenses Investments Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Patents Increase / Decrease 65,100 $ 42,500 91,350 61,150 104,500 109,500 3,600 2,700 35,000 30,000 50,000 345,000 210,000 (120,600)| (110,400) 255,000 255,000 (92,000) (65,000) 35,000 40,000 716,950 $ 630,450 Total assets $ 65,950 12,600 4,000 10,000 Liabilities and Stockholders' Equity Accounts payable $ 42,800 $ Accrued expenses 18,000 Income tax payable 7,000 Dividend payable 15,000 Mortgage payable 60,000 Bonds payable Common stock, $20, par 300,000 Paid-in capital in excess of par-common stock 100,000 Retained earings 174,150 Total liabilities and stockholders' equity $ 716,950 $ 75,000 250,000 75,000 137,900 630,450 Nesbitt Inc. Income Statement For the Year Ended December 31, 2020 $ 800,000 480,000 320,000 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Patent amortization Other operating expenses Total operating expenses Income from operations $ 37,200 5,000 140,500 182,700 137,300 Other revenuues and gains: Gain on sale of investments 15,000 6,500 Other expenses and losses: Interest expense Income before income taxes Income tax expense Net income 8,500 145,800 49,550 96,250 $