Practice Problem - Cash flow statement The following data refers to Skyline Company. Additional information: the company sold a building for $6,000 and bought equipment for $10,000. There was a land sale, but no patent sale or purchase. Income Statement For the Year Ended December 31, 2020 Sales $ 120,000 Less: Expenses Cost of Goods Sold ( 70,000) Depreciation Expense ( 13,000) Amortization Expense ( 1,000) Salaries Expense ( 20,000) Interest Expense ( 2,000) Gain on Sale of Building 1.000 Taxes Expense 6,000) Net Income 9.000 Balance Sheet 2019 2020 Change Cash $ 17 000 S 28,000 11,000 Accounts Receivable 35 000 14,000 (21,000) Inventory 16 000 26,000 10,000 Buildings and Equipment, net 74 000 66,000 (8,000) Land 40 000 31,000 (9,000) Patents 18,000 17 000 (1,000) Total Assets $ 200.000 182.000 2019 2020 Change Accounts Payable 19,000 5,000 (14,000) Interest Payable 1.000 1,000 Mortgage Payable 30 000 10.000 (20,000) Contributed Capital 82,000 112,000 30,000 Retained Earnings 69.000 54 000 (15,000) Total Equities_ $ 200.000 S 182.0001. Prepare a statement of cash flows in good form. For cash flows from operations use the indirect method. Show all supporting calculations. Operating Activities Net Income $9.000 Adjustment to net income to reconcile operating cash flow Add: Depreciation Expense $13.000 Less: Gain on sale of building S(1.000) Add: Amortization of patent $1.000 Decrease in Account Receivable (Add) $21 000 Increase in inventory (Less) $(10.000 Decrease in Account Payable (Less) $(14.000 Increase in Interest Payable (Add) $1.000 Net adjustment to net income ....... $11,000 "Net cash flow provided by operating activity $20,000 Investing Activities ....... Cash proceeds of building $6.000 Cash proceeds of Land $9.000 Payment for purchase of equipment $(10.000 Net cash flow provided by investing activity $5.000 Financing Activities Proceed from issued of common stock $30.000 iKepayment of Mortgage Payable $(20,000 Cash dividends paid $(24,000 Net cash flow provided by Financing Activity $(14,000) Increase in cash $11.000 Add: Cash balance at the beginning $ 17,000 Cash balance at the end of the year $28,00 0 ....A