Transcribed Image Text
In: AccountingThe comparative balance sheets and income statements for MunozCompany follow:Balance SheetsAs of December...The comparative balance sheets and income statements for MunozCompany follow:Balance SheetsAs of December 31Year 2Year 1AssetsCash$22,554$2,987Accounts receivable1,8131,088Inventory6,5036,097Equipment19,69943,369Accumulated depreciation—equipment(5,974)(15,475)Land19,2699,039Total assets$63,864$47,105Liabilities and equityAccounts payable (inventory)$2,738$4,423Long-term debt2,8606,538Common stock25,20011,500Retained earnings33,06624,644Total liabilities and equity$63,864$47,105Income StatementFor the Year Ended December 31, Year 2Sales revenue$33,020Cost of goods sold(13,088)Gross margin19,932Depreciation expense(3,817)Operating income16,115Gain on sale of equipment800Loss on disposal of land(70)Net income$16,845Additional DataDuring Year 2, the company sold equipment for $18,582; it hadoriginally cost $31,100. Accumulated depreciation on this equipmentwas $13,318 at the time of the sale. Also, the company purchasedequipment for $7,430 cash.The company sold land that had cost $3,470. This land was soldfor $3,400, resulting in the recognition of a $70 loss. Also,common stock was issued in exchange for title to land that wasvalued at $13,700 at the time of exchange.Paid dividends of $8,423.RequiredPrepare a statement of cash flows using the indirect method.