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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 Accounts receivable

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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 Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity $22, 349 1,852 6, 476 20,121 (9,524) 15, 184 $56, 458 $ 2,516 1,111 6,071 41, 731 (17, 159) 8,064 $ 42,334 $ 2,745 3,034 22, 700 27, 979 $56, 458 $ 4, 434 6,934 11,500 19, 466 $ 42,334 Income Statement For the Year Ended December 31, Year 2 Sales revenue $ 33,000 Cost of goods sold (13, 080) Gross margin 19, 920 Depreciation expense (3, 414) Operating income 16,506 Income Statement For the Year Ended December 31, Year 2 Sales revenue $ 33,000 Cost of goods sold (13,080) Gross margin 19,920 Depreciation expense (3, 414) Operating income 16,506 Gain on sale of equipment 600 Loss on disposal of land (80) Net income $ 17,026 Additional Data 1. During Year 2, the company sold equipment for $18,651; it had originally cost $29,100. Accumulated depreciation on this equipment was $11,049 at the time of the sale. Also, the company purchased equipment for $7.490 cash. 2. The company sold land that had cost $4,080. This land was sold for $4,000, resulting in the recognition of a $80 loss. Also, common stock was issued in exchange for title to land that was valued at $11,200 at the time of exchange. 3. Paid dividends of $8,513. 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 GYPSY COMPANY Statement of Cash Flows For the Year Ended December 31, Year Cash flows from operating activities: Net income Less: Increases in current assets and Decreases in current liabilities: Increase in accounts receivable Increase in inventory Decrease in accounts payable Depreciation expense Plus: Noncash charges $ 0 Cash flows from investing activities: 0 $ 0 Cash flows from investing activities. 0 Cash flows from financing activities: $ 0 Ending cash balance Schedule of noncash investing and financing activities

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