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Wizard Company had the following information available at the end of 2020. WIZARD COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $20,000 $12,000 Short-term investments 31,500 40,000 Accounts receivable 60,000 50,800 Inventory 95,600 90,000 Prepaid expenses 15,600 26,000 Land 200,000 260,000 Buildings 650,000 650,000 Accumulated depreciation-buildings (75,000) (57,000) Equipment 346,000 150,000 Accumulated depreciation equipment (41,000) o Patents 68,000 72,000 Total assets $1,370,700 $1,293,800 Accounts payable $81,000 $86,900 Income taxes payable 26,800 21,000 Salaries and wages payable 0 8,000 Notes payable, short-term 25,000 25,000 Long-term notes payable 50,000 75,000 Bonds payable 600,000 600,000 Discount on bonds payable (36,015) (40,865) Common stock 110,000 100,000 Paid-in capital in excess of par-common stock 248,600 216,800 Retained earnings 265,315 201,965 Total liabilities and stockholders' equity $1,370,700 $1,293,800 WIZARD COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $1,560,000 Cost of goods sold 976,000 Gross margin 584,000 Operating expenses Selling expenses $160,800 Administrative expenses 116,100 Depreciation/Amortization expense 63,000 Total operating expenses 339,900 Income from operations 244,100 Other revenues/expenses Gain on sale of land 21,000 Loss on sale of short-term investment (8,000) Dividend revenue 4,100 Interest expense (95,350) (78,250) Income before taxes 165,850 Income tax expense 62,500 Net income 103,350 Dividends to common stockholders (40,000) To retained earnings $63,350 Prepare a statement of cash flows for Wizard Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000).) WIZARD COMPANY Statement of Cash Flows (Direct Method) Cash receipts: $ $ Cash payments: $ (Show amounts that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000).) Reconciliation Schedule Reconciliation of Net Income to $ Adjustments to reconcile net income to . $ $

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