Part A says Direct Method

Part B says Indirect Method

SANDHILL COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2020 2019 Cash $70,400 $51,500 Accounts Receivable 154,300 129,500 Inventory 75.000 61,700 Debt investments (available-for-sale) 55,300 84,900 Equipment 69,700 47,700 Buildings 145,500 145,500 Land 40,300 24.900 Totals $610,500 $545.700 Credit Balances Allowance for Doubtful Accounts Accumulated Depreciation-Equipment Accumulated Depreciation-Buildings Accounts Payable Income Taxes Payable Long-Term Notes Payable Common Stock Retained Earnings Totals $10,100 20.800 37.100 65.500 12,000 62,000 310,000 93.000 $610,500 $8,000 13,900 28,000 60,500 9.900 70,000 260,000 95,400 $545,700 Additional data: 1. 2. 3. Equipment that cost $9.900 and was 60% depreciated was sold in 2020. Cash dividends were declared and paid during the year. Common stock was issued in exchange for land. Investments that cost $34,800 were sold during the year. There were no write-offs of uncollectible accounts during the year. 4. 5. Sandhill's 2020 income statement is as follows. $947,700 594,600 353,100 251.900 101,200 Sales revenue Less: Cost of goods sold Gross pront 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 $15,000 (3.000) 12.000 113,200 45,500 $67.700 (a) Compute net cash provided by operating activities under the direct method. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses eg. (45.) Net cash flow from operating activities $ (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g. - 15,000 or in parenthesis eg. (15,000)) SANDHILL COMPANY Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Actvitles Net Income 67700 Adjustments to reconcile net income to Net Cash Provided by Operating Activitles Depreciation Expense Galnon Sale of Eauloment Gain on Sale of Investments - 15000 Loss on Sale of Equipment 3000 Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accounts Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Purchase of Investments Sale of Investments Purchase of Equipment Sale of Equipment Net Cash Provided by Investing Activities Cash Flows from Financing Actlvieles Payment of Long-term Notes Payable IIII III IN Issuance of Common Stock Cash Dividends Pald Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2020 Cash, December 31, 2020