Question

The following are the financial statements of Sunland Company.

SUNLAND COMPANY Balance Sheet December 31
Assets		2021			2020
Cash		$33,440			$17,600
Accounts receivable		26,400			12,320
Inventory		23,760			17,600
Equipment		52,800			68,640
Accumulated depreciation—equipment		(25,520	)		(21,120	)
Total		$110,880			$95,040
Liabilities and Shareholders’ Equity
Accounts payable		$21,120			$13,200
Income taxes payable		6,160			7,040
Notes payable		23,760			29,040
Common shares		15,840			12,320
Retained earnings		44,000			33,440
Total		$110,880			$95,040

SUNLAND COMPANY Income Statement For the Year Ended December 31, 2021
Sales		$212,960
Cost of goods sold		154,000
Gross profit		58,960
Operating expenses		21,120
Income from operations		37,840
Interest expense		2,640
Income before income taxes		35,200
Income tax expense		7,040
Profit		$28,160

Additional Information:
1.		Dividends declared and paid were $17,600. Sunland reports under ASPE.
2.		During the year, equipment was sold for $7,480 cash. This equipment cost $15,840 originally and had a carrying value of $7,480 at the time of sale.
3.		All depreciation expense, $12,760, is in the operating expenses.
4.		All sales and purchases are on account.

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).)

SUNLAND COMPANY
Cash Flow Statement - Indirect Method

Answer 1