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The comparative balance sheets and income statements for Gypsy Company follow: Balance Sheets Assets Cash Accounts receivable As of December 31 Inventory Equipment Accumulated
The comparative balance sheets and income statements for Gypsy Company follow: Balance Sheets Assets Cash Accounts receivable As of December 31 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 Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $ 61,200 (24,500) 36,700 (12,000) 24,700 1,500 (100) $ 26,100 Year 2 Year 1 $ 32,500 4,750 $ 16,300 2,800 11,200 9,800 45,000 52,000 (17,800) (21,800) 28,000 12,000 $103,650 $ 71,100 $ 3,750 $ 4,900 5,800 7,800 47,000 25,000 47,100 $103,650 33,400 $ 71,100 Additional Data 1. During Year 2, the company sold equipment for $23,500; it had originally cost $38,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. 2. The company sold land that had cost $6,000, resulting in the recognition of a $100 loss. 3. Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange. Required Prepare a statement of cash flows using the indirect method (don't forget the supplementary noncash activities shown after the statement).
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