The Sunshine Cash Cow Co

Balance Sheet as of December 31

2019 2020

Assets

Cash $ 2400 $ 8230

Accounts receivable (net) 3800 3560

Marketable securities (at cost) 1800 3300

Allowance for change in value of marketable securities 700 1030

Inventory 9000 9120

Prepaid items 1400 1710

Investments (long term) 7600 5650

Land 16000 16000

Buildings and equipment 32000 45300

Less: Accumulated depreciation (18000) (19180)

Total Assets $ 56700 $ 74720

Liabilities & SH Equity

Accounts payable $ 4200 $ 3200

Income taxes payable 3300 3525

Deferred taxes payable 800 1199

Wages payable 1000 1150

Interest payable 0 600

Note payable (long term) 4200 0

12% Bonds payable 0 15000

Discount on bonds payable (0 ) (435)

Preferred stock, $100 par 8800 8800

Common stock, $10 par 14300 17100

Additionalpaid-in capital 9600 11000

Unrealized increase in value of marketable securities 700 1030

Retained earnings 9800 12551

Total Liab. and SH Equity $ 56700 $ 74720

The Sunshine Cash Cow Company Income Statement

For the Year Ended December 31, 2020

Sales $ 41330

Cost of goods sold (19970)

Depreciation expense (2500)

Wages expense (12400)

Other operating expenses (1100)

Bond interest expense (615)

Dividend revenue 860

Gain on sale of investments 750

Loss on sale of equipment (300)

Income tax expense (2320)

Discontinued operations loss: (240)

Net of reduction of income tax liability 96 (144)

Net Income $ 3591

Other information related to the Company:

1. The firm declared and paid dividends of $840 during the year.

2. Long-term non-marketable investments that cost $1950 were sold, resulting in a $750 gain.

3. The long-term note payable was paid by issuing 280 shares of common stock at the beginning of the year.

4. On January 10, the company discontinued an operating unit comprised of equipment with an original cost of $800 and a book value of $480.Sale of the equipment yielded a before-tax loss from discontinued operations of $240.

5. The firm sold equipment with an original cost of $2500 and a book value of $1500, resulting in a $300 loss.

6. The firm purchased new equipment for $16600.

7. 12% bonds payable were issued on September 1, 2020 at 97% of face value.They mature on September 1, 2030.The company uses the straight-line method to amortize the discount.

8. Taxable income was less than pretax accounting income, resulting in a $399 increase in deferred taxes payable.

9. Short-term marketable securities were purchased at a cost of $1500.The portfolio was increased by $330 to a $4330 fair value at year-end by adjusting the related allowance account.

REQUIRED:Using this information, prepare (1) the firm's Statement of Cash Flows (all three sections) for 2020 using the direct method for the operating activities section, including a schedule of any non-cash investing and financing activities at the bottom of this statement, and (2) a separate schedule of the operating activities section (only) using the indirect method.

How would you do the direct method and indirect method?