Problem $12-18$A $($Algo$)$ Using financial statements to prepare a statement of cash flows$-$Indirect method LO $12-1,12-3,12-4$

The comparative balance sheets and income statements for Gypsy Company follow.

Liabilities and stockholders' equity Accounts payable $($inventory$)$ $$2,753$ $$4,448$ Long$-$term debt $2,6736,109$ Common stock $21,6008,000$ Retained earnings $36,60826,490$ Total liablities and stockholders' equity $$63,634$$$45,047$

Income Statement for the Year Ended December $31,$ Year $2$

Sales revenue

cost of goods sold

Gross margin

Depreciation expense

Operating income

Gain on sale of equipment

$\backslash$table$[[$$$38,500$

Net income

$$20,236$

Additional Data

During Year $2,$ the company sold equipment for $$18,174,$ it had originally cost $$29,300.$ Accumulated depreciation on this equipment was $$11,926$ at the time of the sale. Also, the company purchased equipment for $$6,820$ cash.

$2$ The company sold land that had cost $$3,790.$ This land was sold for $$3,700,$ resulting in the recognition of a $$90$ loss Also, common stock was issued in exchange for title to land that was valued at $$13,600$ at the time of exchange.

Paid dividends of $$10,118.$

Required

Prepare a statement of cash flows using the indirect method.

Note: Amounts to be deducted should be indicated with a minus sign.

$1$

$5\mathrm{.}5$

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