The comparative statement of financial position and statement of income for NextWave Company follow.

Additional information:

1. Some of the long-term investments were sold at their carrying value. As a result, there was no gain or loss on this transaction.

2. Equipment costing $47,000 was sold for $10,500, which was $3,700 more than its net carrying amount at the time of disposal.

Required

a. Prepare the company’s statement of cash flows for 2020 using the indirect method.

b. Calculate the amount of cash that was paid for income taxes during 2020.

c. Determine the cash flows from operating activities using the direct method.

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NEXTWAVE COMPANY Comparative Statement of Financial Position Dec. 31, 2020 Dec. 31, 2019 Assets $ 66,700 $ 47,250 Cash 76,800 Accounts receivable 57,000 Inventory 121,900 92,650 84,500 Long-term investments 97,000 Property, plant, and equipment 280,000 235,000 Accumulated depreciation (79,500) (70,000) $550,400 $458,900 Liabilities and shareholders' equity $ 52,700 $ 49,200 Accounts payable Income tax payable 12,000 18,000 70,000 Bonds payable 100,000 200,000 Common shares 230,000 155,700 Retained earnings 121,700 $458,900 $550,400 NEXTWAVE COMPANY Statement of Income For the year ended December 31, 2020 Sales revenue $437,500 Gain on sale of equipment 3,700 441,200 Expenses Cost of goods sold $200,500 Operating expenses (excluding depreciation) 63,800 Depreciation expense 49,700 Income tax expense 40,000 354,000 $ 87,200 Net income