The income statement for the year ended December 31, 2020, for Buffalo Manufacturing Company contains the following condensed information.

BUFFALO CO.

INCOME STATEMENT

Revenues $ 6,503,000

Operating expenses (excluding depreciation) $4,952,000

Depreciation expense 884,000

5,836,000

Income before income tax 667,000

Income tax expense 300,150

Net income $ 366,850

Included in operating expenses is a $21,500 loss resulting from the sale of machinery for $286,500 cash. The company purchased machinery at a cost of $752,000.

Buffalo reports the following balances on its comparative balance sheets at December 31.

BUFFALO CO.

COMPARATIVE BALANCE SHEETS (PARTIAL)

2020 2019

Cash $642,350 $134,000

Accounts receivable 775,000 617,500

Inventory 832,000 871,500

Accounts payable 521,00 505,500

Income tax expense of $300,150 represents the amount paid in 2020. Dividends declared and paid in 2020 totaled $196,000.

Collapse question part

(a)

the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

BUFFALO COMPANY

Statement of Cash Flows

$

Adjustments to reconcile net income to

$

$