Problem #4 Prepare a Statement of Cash Flows by Using Indirect Method

A comparative balance sheet for Rocker Company appears below:

ROCKER COMPANY

Comparative Balance Sheet

Dec. 31, 2021 Dec. 31, 2020

Assets

Cash $ 33,000 $10,000

Accounts receivable 18,000 14,000

Inventory 25,000 18,000

Prepaid expenses 6,000 9,000

Long-term investments -0- 18,000

Equipment 60,000 32,000

Accum depreciationequipment (20,000) (14,000)

Total assets $122,000 $87,000

Liabilities and Stockholders' Equity

Accounts payable $ 17,000 $ 7,000

Bonds payable 37,000 47,000

Common stock 40,000 23,000

Retained earnings 28,000 10,000

Total liabilities and stockholders' equity $122,000 $87,000

Additional information:

1. Net income for the year ending December 31, 2021 was $33,000.

2. Cash dividends of $15,000 were declared and paid during the year.

3. Long-term investments that had a cost of $18,000 were sold for $14,000.

4. Sales for 2021 were $120,000.

Instructions Prepare the operating cash activity section of a statement of cash flows for the year ended December 31, 2021, using the indirect method. Bonus, Prepare a complete statement of cash flow.