The records of Medical Software Inc. for the companys Year 2 fiscal year end show the following financial information. The company has a December 31 year end and has chosen to use ASPE for its financial reporting. All amounts reported are in thousands of dollars. Medical Software Inc. Balance sheet As at December 31 (000s) Year 2 Year 1 Cash $2,990 $1,500 Accounts receivable, net 4,000 3,770 Inventory 2,010 2,060 Prepaid expenses 460 470 Investments 750 200 Intangible assets 6,480 6,000 Property, plant, and equipment 6,100 5,000 Accumulated depreciation and amortization (2,200) (2,000) $20,590 $17,000 Trade and other payables $6,790 $7,000 Deferred revenue 2,100 2,000 Long-term notes payable 1,300 Common shares 7,000 4,000 Retained earnings 3,400 4,000 $20,590 $17,000 Medical Software Inc. Income statement For the year ended December 31, Year 2 (000s) Sales $3,600 Cost of goods sold 500 Gross profit 3,100 Depreciation 700 Development costs 600 Gain on sale of property, plant, and equipment (400) Other expenses 500 Total expenses 1,400 Net income $1,700 Intermediate Financial Reporting 1 Unit 1 Practice Problems 6 / 9 Additional information: Property, plant, and equipment with a cost of $1,000 and an accumulated depreciation balance of $500 was sold on June 30, Year 2. During the year, the company issued shares with a value of $1,800 in exchange for property, plant, and equipment. Included in other expenses is an impairment loss of $300 due to a permanent decline in the fair value of investments held by the company. As at December 31, Year 2, the company had an allowance for doubtful accounts balance of $400 (December 31, Year 1 $300). Included in other expenses for the year ended December 31, Year 2, is a bad debt expense of $200. Required: Prepare the cash flow statement of Medical Software for the year ended December 31, Year 2, using the indirect method.