The comparative balance sheets for Hinckley Corporation show the following information. Cash Accounts receivable Inventory Investments Buildings Equipment Patents December 31 2014 2013 $39,610 $14,200 18,460 11,900 17,110 9,750 -0 3,760 -O- 30,380 51,050 22,500 5,440 $131,670 $99,160 6,670 Allowance for doubtful accounts Accumulated depreciation equipment Accumulated depreciation-building Accounts payable Dividends payable Notes payable, short-term (nontrade) Long-term notes payable Common stock Retained earnings $3,170 2,410 -0- 5,440 -0- 2,940 32,860 43,230 41,620 $131,670 $5,290 5,220 6,480 3,760 4,030 3,950 25,850 33,190 11,390 $99,160 Additional data related to 2014 are as follows. 1. Equipment that had cost $10,930 and was 40% depreciated at time of disposal was sold for $3,840. 2. $10,040 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $4,030. 4. On January 1, 2014, the building was completely destroyed by a flood. Insurance proceeds on the building were $32,060 (net of $2,580 taxes). 5. Investments (available-for-sale) were sold at $1,680 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 $17,050 was issued for the acquisition of equipment. 8. Interest of $2,630 and income taxes of $7,300 were paid in cash. Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. HINCKLEY CORPORATION Statement of Cash Flows For the Year Ended December 31, 2014 Cash Flows from Operating Activities Net Tncome Adjustments to reconcile net income to | Cash Flows from Operating Activities Gain from Flood Damage Depreciation Expense Patent Amortization Loss on Sale of Equipment AAAAAAAA 'il Gain on Sale of Equipment Increase in Accounts Receivable Net) Increase in Inventory Increase in Accounts Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Investments Sale of Equipment Purchase of Equipment Proceeds from Flood Damage to Building Net Cash Provided by Investing Activities 2 Cash Flows from Financing Activities Payment of Short-Term Note Payable Payment of Dividends- Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2014 Cash, December 31, 2014 Supplemental disclosures of cash flow information: Cash Paid During the Year for Income Taxes 7