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The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash $ 25,779

The comparative balance sheets and income statements for Gypsy Company follow.

Balance Sheets As of December 31
Year 2 Year 1
Assets
Cash $ 25,779 $ 2,523
Accounts receivable 2,158 1,295
Inventory 6,559 6,149
Equipment 18,948 43,638
Accumulated depreciationequipment (7,717 ) (17,493 )
Land 19,647 9,607
Total assets $ 65,374 $ 45,719
Liabilities and equity
Accounts payable (inventory) $ 2,552 $ 4,122
Long-term debt 2,728 6,236
Common stock 24,100 10,000
Retained earnings 35,994 25,361
Total liabilities and equity $ 65,374 $ 45,719
Income Statement For the Year Ended December 31, Year 2
Sales revenue $ 39,700
Cost of goods sold (15,735 )
Gross margin 23,965
Depreciation expense (3,139 )
Operating income 20,826
Gain on sale of equipment 500
Loss on disposal of land (60 )
Net income $ 21,266

Additional Data

  1. During Year 2, the company sold equipment for $18,785; it had originally cost $31,200. Accumulated depreciation on this equipment was $12,915 at the time of the sale. Also, the company purchased equipment for $6,510 cash.
  2. The company sold land that had cost $4,060. This land was sold for $4,000, resulting in the recognition of a $60 loss. Also, common stock was issued in exchange for title to land that was valued at $14,100 at the time of exchange.
  3. Paid dividends of $10,633.

Required Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

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