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The comparative balance sheets and income statements for Gypsy Company follow.

Additional Data

1. During Year 2, the company sold equipment for $18,549; it had originally cost $28,500. Accumulated depreciation on this equipment was $10,601 at the time of the sale. Also, the company purchased equipment for $6,530 cash.

2. The company sold land that had cost $4,490. This land was sold for $4,400, resulting in the recognition of a $90 loss. Also, common stock was issued in exchange for title to land that was valued at $14,500 at the time of exchange.

3. Paid dividends of $9,768.

Required

Prepare a statment of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign)

Assets Cash Accounts receivable $24, 848 $ 2,731 Inventory Equipment 1,248 5,972 20,76742, 737 2, 080 6,370 Accumulated depreciation-equipment (8,610) (15,991) Land 18, 890 $64, 345 8, 880 45,577 Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings $ 2, 600$ 4,200 6, 933 8, 500 ,712 25, 944 $64, 345S 45, 577 3,033 23, 000 Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income S 36, 770 22, 196 18,976 (14, 574) (3, 220) 650 90) S 19,536

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