Exercise 11-10B Prepare a statement of cash flows-indirect method (LO11-3, 11-4, 11-5) The balance sheets for a company, along with additional information, are provided below: Balance Sheets December 31, 2021 and 2020 2021 2020 Assets 154,350 74,400 86,000 2,200 $ 169,000 87,500 71,900 1,100 435,000 726,000 (403,000) $1,074,950 435,000 625,000 ( 250,000) $1,139,500 Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity $ 90,000 6,750 6, 200 76,900 13,500 4,100 112,500 225,000 655,000 204,500 $1,074,950 655,000 165,000 $1,139,500 Additional Information for 2021: 1. Net income is $60,000. 2. The company purchases $101,000 in equipment. 3. Depreciation expense is $153,000. 4. The company repays $112,500 in notes payable. 5. The company declares and pays a cash dividend of $20,500. Required: Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.) Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net income $ 60,000 Adjustments to reconcile net income to net cash flows from operating activities Depreciation expense 153,000 TV Decrease in accounts receivable Increase in inventory Increase in prepaid rent Increase in accounts payable Decrease in interest payable Increase in income tax payable Net cash flows from operating activities $ 213,000 Cash Flows from Investing Activities Purchase of equipment Net cash flows from investing activities 0 Cash Flows from Financing Activities Payment of cash dividends Payment of notes payable 0 Net cash flows from financing activities Net decrease in cash Cash at the beginning of the period Cash at the end of the period