VIRTUAL COMPANY Comparative Balance Sheets December 31, 2020 and 2019 2020 2019 $ 63,500 18,100 162,300 243,900 89,900 (40,500) $ 293,300 $ 63,900 22,100 127,700 213,700 75,600 (28,000) $ 261,300 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity $ 43,100 800 43,900 $ 46,500 1,000 47,500 210,000 39,400 $293,300 192,000 21,800 $ 261,300 VIRTUAL COMPANY Income Statement For Year Ended December 31, 2020 Sales $ 77,200 Cost of goods sold (32,100) Gross profit 45, 100 Operating expenses Depreciation expense $12,500 Other expenses 9,400 Total operating expense 21,900 Income before taxes 23,200 Income tax expense Net income $ 17,600 5,600 Additional Information a. No dividends are declared or paid in 2020. b. Issued additional stock for $18,000 cash in 2020. c. Purchased equipment for cash in 2020; no equipment was sold in 2020. Required: Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2020, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) Required: Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2020, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) VIRTUAL COMPANY Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2020 Net Income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Cash balance at beginning of year Cash balance at end of year