The comparative balance sheets for Hinckley Corporation show the following information.

Additional data related to 2020 are as follows.

1. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.

2. $10,000 of the long-term note payable was paid by issuing common stock.

3. Cash dividends paid were $5,000.

4. On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,000 (net of $2,000 taxes).

5. Debt investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past.

6. Cash was paid for the acquisition of equipment.

7. A long-term note for $16,000 was issued for the acquisition of equipment.

8. Interest of $2,000 and income taxes of $6,500 were paid in cash.

Instructions

Prepare a statement of cash flows using the indirect method.

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December 31 2020 2019 $ 33,500 Cash $13,000 Accounts receivable 12,250 10,000 12,000 Inventory 9,000 Available-for-sale debt investments -0- 3,000 Buildings Equipment -0- 29,750 45,000 20,000 5,000 Patents 6,250 $107,750 $91,000 $ 3,000 $ 4,500 Allowance for doubtful accounts Accumulated depreciation–equipment Accumulated depreciation–building Accounts payable Dividends payable Notes payable, short-term (nontrade) Long-term notes payable Common stock 2,000 4,500 6,000 --0- 5,000 3,000 5,000 -0- 3,000 4,000 31,000 25,000 43,000 33,000 Retained earnings 20,750 6,000 $107,750 $91,000