Problem 23-02 Your answer is partially correct. Try again. 2020 The comparative balance sheets for Sage Corporation show the following information. December 31 2019 Cash $33,600 $13,100 Accounts receivable 12,100 10,100 Inventory 11,900 9,000 Available-for-sale debt investments -0 3,100 Buildings -0 29,800 Equipment 45,500 20,100 Patents 5,000 6,200 $108,100 $91,400 Allowance for doubtful accounts Accumulated depreciation equipment Accumulated depreciation-building Accounts payable Dividends payable Notes payable, short-term (nontrade) Long-term notes payable Common stock Retained earnings $3,100 2,000 -0- 5,000 -0- 3,100 31,000 43,000 20,900 $108,100 $4,400 4,600 6,100 3,100 4,900 4,100 25,000 33,000 6,200 $91,400 Additional data related to 2020 are as follows. 1. Equipment that had cost $10,800 and was 40% depreciated at time of disposal was sold for $2,600. 2. $10,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $4,900. 4. On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $29,900 (net of $2,000 taxes). 5. Debt investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. 6. Cash was paid for the acquisition of equipment. 7. A long-term note for $16,000 was issued for the acquisition of equipment. 8. Interest of $2,000 and income taxes of $6,600 were paid in cash. 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 e.g. (15,000).) SAGE CORPORATION Statement of Cash Flows For the Year Ended December 31, 2020 X Cash, January 1, 2020 19600 Net Income Adjustments to reconcile net income to Net Increase in Cash Depreciation Expense 1720 Loss on Sale of Equipment 3880 Patent Amortization 1200 Gain from Flood Damage 2100 X Gain on Sale of Equipment 1700 Increase in Accounts Receivable (Net) (3,300) Increase in Inventory (2,900) Increase in Accounts Payable 1,900 10 Net Cash Provided by Operating Activities Sale of Equipment 2,600 KO Proceeds from Flood Damage to Building 31,900 x Gain on Sale of Investments 4,800 Purchase of Equipment (20,200) Net Cash Used by Investing Activities 19,100 Cash Flows from Investing Activities Payment of Short-term Note Payable (11,000) Payment of Dividends (4,900) > Net Cash Used by Financing Activities (15,900) x= x [Net Cash Used by Investing Activities 19,100 Supplemental disclosures of cash flow information: Purchased Equipment by Issuing Notes Payable (11,000) Payment of Dividends (4,900) Net Cash Used by Financing Activities Cash Paid During the Year for Income Taxes 20,500 Increase in Accounts Receivable (Net) 13,100 33,600