Preparing and interpreting a statement of cash flows using a T-account work sheet Condensed financial statement data for Hale Company for the current year appear in it Exhibits 5.27 and 5.28. During the current year the firm sold for $5,000 equipment costing $15,000 with $10,000 of accumulated depreciation.

a. Prepare a statement of cash flows for Hale Company for the war using the indirect method of computing cash flow from operations Support the statement with a T-account work sheet.

b. Derive a presentation of cash flows from operations using the direct method.

c. Present a statement of cash flows for Hale Company using the direct method for cash flows from operations. Include reconciliation of net income to cash flow from operations.

d. Comment on the pattern of cash flows from operations, investing, and financingactivities.

Hale Company Comparative Balance Sheet (Problem 34) EXHIBIT 5.27 December 31 auary 1 ASSETS $ 52,000 Cash.. $ 58,000 Accounts Receivable 93,000 106,000 Inventory Land..... 151,000 162,000 30,000 30,000 Buildings and Equipment (cost) Less Accumulated Depreciation. Tatal Assets.. 790,000 830,000 (504,000) $ 682,000 (460,000) 656,000 LIABILITIES AND SHAREHOLDERS EQUITY $ 136,000 Accaunts Payable for Inventory. Interest Payable. Martgage Payable . Common Stock $ 141,000 10,000 8,000 120,000 109,000 250,000 250,000 Retained Earnings Tatal Liabilities and Shareholders' Equity 140,000 174,000 $ 656,000 5 682,000