A comparative statement of financial position for Carmichael Industries Inc. follows:

Additional information:

1. Net income for the fiscal year ending December 31, 2020, was $129,000.

2. Cash dividends of $60,000 were declared and paid. Dividends paid are treated as financing activities.

3. Bonds payable amounting to $50,000 were retired through issuance of common shares.

4. Land was sold at a gain of $5,000.

5. No equipment was sold during the year.

Instructions

a. Prepare a statement of cash flows using the indirect method along with any necessary note disclosure.

b. Comment in general on the results reported in the statement of cash flows.

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Carmichael Industries Inc. Statement of Financial Position December 31, 2020 December 31 Assets 2020 2019 $ 21,000 $ 34,000 54,000 Cash Accounts receivable 104,000 Inventory Land 220,000 71,000 189,000 110,000 Equipment Accumulated depreciation-equipment 260,000 200,000 (69,000) (42,000) Total $607,000 $545,000 Liabilities and Shareholders' Equity Accounts payable Bonds payable $ 52,000 150,000 $ 59,000 200,000 Common shares 214,000 191,000 164,000 Retained earnings 122,000 Total $607,000 $545,000