Kate Petusky prepared Addison Controls’ balance sheet and income statement for 2020. Before she could complete the statement of cash flows, she had to leave town to attend to a family emergency. Because the full set of statements must be provided to the auditors today, Addison’s president. Lance Meyers, has asked you to prepare the statement of cash flows. Meyers has provided you with the balance sheet and income statement that Petusky prepared, as well as some notes she made:

• Equipment with an original cost of $35,000 was sold for $20,300. The book value of the equipment was $19,400.
• On June 1, 2020, the company purchased new equipment for cash at a cost of $17,500.
• At the end of the year, the company issued a note payable for $10,000 cash. The note will mature on December 31, 2024.
• The company paid $23,200 in cash dividends for the year.

Required

Using the direct method. prepare Addison Control’s statement of cash flows for 2020.

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Addison Controls Income Statement For the Year Ended December 31, 2020 Sales revenue $129,900 Cost of goods sold 69,800 60,100 Gross margin Selling expense Administrative expense Salaries expense 15,000 8,000 18,000 Depreciation expense Interest expense 1,900 6,000 48,900 Income before gain and taxes 11,200 Gain on sale of land 900 Income tax expense 800 Net income $ 11,300 Addison Controls Comparative Balance Sheets As of December 31 2020 2019 Cash $ 5,100 $ 4,300 Accounts receivable, net 5,800 5,500 Inventory 32,200 34,200 Total current assets 43,100 44,000 Property, plant, & equipment, net 211,500 215,300 Total assets $254,600 $259,300 $ 3,400 $ 5,900 Accounts payable Accrued expenses Salaries payable Taxes payable Note payable 1,000 700 1,400 1,500 2,100 2,600 60,000 50,000 Total liabilities 67,900 60,700