Comparative balance sheet accounts of Sharpe Company are presented below.

Additional data:

1. Equipment that cost $10,000 and was 60% depreciated was sold in 2020.

2. Cash dividends were declared and paid during the year.

3. Common stock was issued in exchange for land.

4. Debt investments that cost $35,000 were sold during the year.

5. There were no write-off s of uncollectible accounts during the year.

Sharpe?s 2020 income statement is as follows.

Instructions

a. Compute net cash provided by operating activities under the direct method.

b. Prepare a statement of cash flows using the indirect method.

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Sharpe Company Comparative Balance Sheet Accounts As of December 31 Debit Balances 2019 2020 $ 70,000 $ 51,000 130,000 Cash Accounts Receivable 155,000 Inventory Debt investments (available-for-sale) 75,000 61,000 85,000 55,000 Equipment Buildings Land 70,000 48,000 145,000 145,000 40,000 25,000 Totals $610,000 $545,000 Credit Balances $ 10,000 $ 8,000 Allowance for Doubtful Accounts Accumulated Depreciation-Equipment Accumulated Depreciation-Buildings Accounts Payable Income Taxes Payable Long-Term Notes Payable 21,000 14,000 37,000 28,000 66,000 60,000 10,000 70,000 12,000 62,000 Common Stock 310,000 260,000 Retained Earnings 92,000 95,000 Totals $610,000 $545,000 Sales revenue Less: Cost of goods sold Gross profit Less: Operating expenses (includes depreciation expense and bad debt expense) Income from operations Other revenues and expenses Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income $950,000 600,000 350,000 250,000 100,000 $15,000 (3,000) 12,000 112,000 45,000 $ 67,000