The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land $25,805 1,983 6,574 15,199 (8,599) 20,062 $61,024 $ 2,856 1,190 6,163 40,069 (18,716) 11,642 $ 43,204 Total assets Liabilities and stockholders' equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and stockholders' equity $ 2,597 2,868 22,200 33,359 $61,024 $ 4,196 6,556 9,000 23, 452 $ 43,204 Income Statement For the Year Ended December 31, Year 2 Sales revenue $ 37,920 Cost of goods sold (15,030) Gross margin 22,890 Depreciation expense (3,596) Operating income 19, 294 Gain on sale of equipment 600 Loss on disposal of land (80) Net income $ 19,814 Additional Data e 1. During Year 2, the company sold equipment for $18,287; it had originally cost $31,400. Accumulated depreciation on this equipment was $13,713 at the time of the sale. Also, the company purchased equipment for $6,530 cash. 2. The company sold land that had cost $4,780. This land was sold for $4,700, resulting in the recognition of a $80 loss. Also, common stock was issued in exchange for title to land that was valued at $13,200 at the time of exchange. 3. Paid dividends of $9,907. Required Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) GYPSY COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Less: Increases in current assets and Decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Cash flows from financing activities: Cash flows from investing activities: Cash flows from financing activities: Ending cash balance Schedule of noncash investing and financing activities