The following are the financial statements of Nosker Company.

NOSKER COMPANY Comparative Balance Sheets December 31
Assets		2020			2019
Cash		$34,000			$19,100
Accounts receivable		32,900			18,750
Inventory		26,350			20,400
Equipment		59,050			77,600
Accumulated depreciation—equipment		(30,000	)		(23,150	)
Total		$122,300			$112,700
Liabilities and Stockholders’ Equity
Accounts payable		$28,050			$ 16,400
Income taxes payable		7,050			8,100
Bonds payable		27,200			32,900
Common stock		18,900			13,150
Retained earnings		41,100			42,150
Total		$122,300			$112,700

NOSKER COMPANY Income Statement For the Year Ended December 31, 2020
Sales revenue		$241,150
Cost of goods sold		176,000
Gross profit		65,150
Operating expenses		24,300
Income from operations		40,850
Interest expense		3,600
Income before income taxes		37,250
Income tax expense		8,300
Net income		$28,950

Additional data:

1.		Dividends declared and paid were $30,000.
2.		During the year, equipment was sold for $8,300 cash. This equipment cost $18,550 originally and had a book value of $8,300 at the time of sale.
3.		All depreciation expense, $17,100, is in the operating expenses.
4.		All sales and purchases are on account.

a) Prepare a statement of cash flows using the indirect method:

Answer rating: 100% (QA)

To prepare the statement of cash flows using the indirect method we need to start with net income an... View the full answer