Answer and Explanation:
The Preparation of cash flows for 2020 using the indirect method is shown below:-
Cash flow from Operating Activities
Net income $134,100
Add: Adjustments to reconcile net income
Add; Depreciation on property, plant and equipment $25,000 ($66,250 - $41,250)
Less: Increase in Accounts receivable ($8,300) ($84,350 - $76,050)
Add: Decrease in Inventory $7,750 ($180,500 - $188,250)
Less: Decrease in Accounts payable ($12,950) ($33,400 - $46,350)
Net cash provided by Operating Activities $145,600
Cash flow from Investing Activities
Add:Sale of Land $24,850
Less: Purchase of equipment ($49,800) ($249,600 - $199,800)
Net cash used in Investing Activities ($24,950)
Cash flow from Financing Activities
Issue of common stock $48,900
Less: Redemption of bonds ($50,700)
Less: Dividend paid ($68,300)
Net cash used in Financing Activities ($70,100)
Net increase in Cash and Cash Equivalents $50,550
Cash in the beginning of the period $22,400
Ending cash balance for the year $72,950
