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Warner Company Comparative Balance Sheets December 31 2025 2024 Assets Cash $35,000 $ 20,000 Accounts receivable 20,000 14,000 Inventory 28,000 20,000 Property, plant, and equipment

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed Warner Company Comparative Balance Sheets December 31 2025 2024 Assets Cash $35,000 $ 20,000 Accounts receivable 20,000 14,000 Inventory 28,000 20,000 Property, plant, and equipment 60,000 78,000 Accumulated depreciation (32,000) (24,000) Total $111,000 $108,000 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $19,000 $ 15,000 7,000 8,000 17,000 33,000 18,000 14,000 50,000 38,000 $111,000 $108,000 Warner Company Income Statement For the Year Ended December 31, 2025 Sales revenue $242,000 Cost of goods sold 175,000 Gross profit 67,000 Selling expenses $18,000 Administrative expenses 6,000 24,000 Income from operations 43,000 Interest expense 3,000 Income before income taxes 40,000 Income tax expense 8,000 Net income $ 32,000 Additional data: 1. Depreciation expense was $17,500. 2. Dividends declared and paid were $20,000. 3. During the year, equipment was sold for $8,500 cash. This equipment originally cost $18,000 and had accumulated depreciation of $9,500 at the time of sale. 4. Bonds were redeemed at their carrying value. 5. Common stock was issued at par for cash. Prepare a 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).) WARNER COMPANY Statement of Cash Flows - Indirect Method For the Year Ended December 31, 2025 Adjustments to reconcile net income to $ $

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