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The comparative balance sheets for ABC Corporation show the following information. December 31 2020 2019 Cash $33,500 $13,000 Accounts Receivable 12,250 10,000 Inventory 12,000 9,000

  1. The comparative balance sheets for ABC Corporation show the following information.

December 31

2020 2019

Cash $33,500 $13,000

Accounts Receivable 12,250 10,000

Inventory 12,000 9,000

Available-for-sale debt investments -0- 3,000

Buildings -0- 29,750

Equipment 45,000 20,000

Patents 5,000 6,250

$107,750 $91,000

Allowance for doubtful accounts $3,000 $4,500

Accumulated depreciation-equipment 2,000 4,500

Accumulated depreciation-building -0- 6,000

Accounts payable 5,000 3,000

Dividends payable -0- 5,000

Notes payable, short-term(nontrade) 3,000 4,000

Long-term notes payable 31,000 25,000

Common stock 43,000 33,000

Retained earnings 20,750 6,000

$107,750 $91,000

Additional data related to 2020 are as follows.

  1. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.
  2. $10,000 of the long-term note payable was paid by issuing common stock.
  3. Cash dividends paid were $5,000.
  4. On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,000 (net of $2,000 taxes).
  5. Debt investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past.
  6. Cash was paid for the acquisition of equipment.
  7. A long-term note for $16,000 was issued for the acquisition of equipment.
  8. Interest of $2,000 and income taxes of $6,500 were paid in cash.

Requirement:

Prepare a statement of cash flows in good form using the indirect method.

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