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P17-11B Presented are the comparative balance sheets for Vernet Company at December 31. VERNET COMPANY Comparative Balance Sheets December 31 Assets 2012 2011 Cash $ 41,000 $ 57,000 Accounts receivable 77,000 64,000 Inventory 172,000 140,000 Prepaid expenses 12,140 16,540 Land 110,000 150,000 Equipment 215,000 175,000 Accumulated depreciation equipment (70,000) (42,000) Buildings 250,000 250,000 Accumulated depreciation-buildings (70,000) (50,000) Total $737,140 $760,540 Liabilities and Stockholders' Equity Accounts payable $ 58,000 $ 45,000 Bonds payable 235,000 265,000 Common stock, $1 par 280,000 250,000 Retained earnings 164,140 200,540 Total $737,140 $760,540 Additional information: 1. Operating expenses include depreciation expense $55,000 and charges from prepaid expenses of $4,400. 2. Land was sold for cash at cost. 3. Cash dividends of $84,290 were paid. 4. Net income for 2012 was $47,890. 5. Equipment was purchased for $80,000 cash. In addition, equipment costing $40,000 with a book value of $33,000 was sold for $37,000 cash. 6. Bonds were converted at face value by issuing 30,000 shares of $1 par value common stock. Instructions Prepare a statement of cash flows for 2012 using the indirect method