he income statement, balance sheets, and additional information for Cloud Mangu are provided. Additional Information for $2026$:

Purchased investment in bonds for $$95,000.$

Sold land for $$13,000.$ The land originally was purchased for $$20,000,$ resulting in a $$7,000$ loss being recorded at the time of the

sale.

Purchased $$50,000$ in equipment by issuing a $$50,000$ long$-$term note payable to the seller. No cash was exchanged in the

transaction.

Declared and paid a cash dividend of $$20,000.$

Required:

Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note.

Note: Amounts to be deducted, cash outflows, and any decrease in cash should be indicated with a minus sign. Answer is not complete.

CLOUD MANGU

Income Statement

For the Year Ended December $31,2026$

Net sales $ $2,456,000$

Expenses:

Cost of goods sold $ $1,450,000$

Operating expenses $758,000$

Depreciation expense $17,000$

Loss on sale of land $7,000$

Interest expense $10,000$

Income tax expense $38,000$

Total expenses $2,280,000$

Net income $ $176,000$

CLOUD MANGU

Balance Sheets

December $31$

$20262025$

Assets

Current assets:

Cash $ $138,600$ $ $60,800$

Accounts receivable $70,00050,000$

Inventory $105,000125,000$

Prepaid rent $8,4004,200$

Long$-$term assets:

Investments $95,0000$

Land $200,000220,000$

Equipment $250,000200,000$

Accumulated depreciation $(57,000)(40,000)$

Total assets $ $810,000$ $ $620,000$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $57,000$ $ $71,000$

Interest payable $5,0008,000$

Income tax payable $14,00013,000$

Long$-$term liabilities:

Notes payable $265,000215,000$

Stockholders' equity:

Common stock $200,000200,000$

Retained earnings $269,000113,000$

Total liabilities and stockholders$$ equity $ $810,000$ $ $620,000$

Additional Information for $2026$:

Purchased investment in bonds for $$95,000.$

Sold land for $$13,000.$ The land originally was purchased for $$20,000,$ resulting in a $$7,000$ loss being recorded at the time of the sale.

Purchased $$50,000$ in equipment by issuing a $$50,000$ long$-$term note payable to the seller. No cash was exchanged in the transaction.

Declared and paid a cash dividend of $$20,000.$

Required:

Prepare the statement of cash flows using the indirect method. Disclose any noncash transactions in an accompanying note