Question Two Statement of Cash Flows (Indirect Method)

Blue Planet Companys income statement and comparative balance sheets follow.

Blue Planet Company Income Statement For the Year Ended December 31, 2021
Sales		$ 925,000
Cost of goods sold	$ 510,000
Wages and other operating expenses	150,000
Depreciation expense	41,000
Patent amortization expense	8,000
Interest expense	15,000
Income tax expense	54,000
Loss on sale of equipment	4,000
Gain on sale of investments	(5,000)	777,000
Net income		$ 148,000
RAINBOW COMPANY Balance Sheet
	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents	$ 62 ,000	$ 25,000
Accounts receivable	51,000	30,000
Inventory	97,000	77,000
Prepaid expenses	11,000	21,000
Investments	____	57,000
Land	195,000	100,000
Buildings	460,000	350,000
Accumulated depreciation, Buildings	(92,000)	(75,000)
Equipment	179,000	225,000
Accumulated depreciation, Equipment	(42,000)	(46,000)
Patents	54,000	32,000
Total assets	$ 975,000	$ 796,000
Liabilities and Stockholders Equity
Accounts payable	$ 23,000	$ 16,000
Interest payable	7,000	5,000
Accrued expenses	21,000	15,000
Income tax payable	7,000	10,000
Bonds payable	158,000	125,000
Preferred stock ($100 par value)	125,000	75,000
Common stock ($5 par value)	384,000	364,000
Capital surplus - Common	140,000	124,000
Retained earnings	150,000	62,000
Treasury stock	(40,000)
	$ 975,000	$ 796,000

During 2021, the following transactions and events occurred in addition to the companys usual business activities.

1. Sold investments costing $57,000 for $62,000.
2. Purchased land for cash.
3. Capitalized an expenditure made to improve the building.
4. Sold equipment for $14,000 cash that originally cost $46,000 and had $28,000 accumulated depreciation. This means the book value of the equipment sold was $46,000 $28,000 = $18,000.
5. Issued bonds at face value for cash.
6. Acquired a patent with a fair value of $30,000 by issuing 300 shares of preferred stock at par value. Also issued an additional 200 shares for a cash price of $20,000.
7. Declared and paid a $60,000 cash dividend.
8. Issued 4,000 shares of common stock for cash at $9 per share.
9. Recorded depreciation of $17,000 on buildings and $24,000 on equipment.

Required

2021. Compute the change in cash and cash equivalents that occurred during 2021.
2022. Prepare a 2021 accounting statement of cash flows using the indirect method.
2023. Prepare a 2021 financial statement of cash flows. Hint: CF (A) = CF (B) + CF (S)