Question

1. Preparing a Statement of Cash Flows

   Erie Company reported the following comparative balance sheets:
   

   	2019		2018
   Assets:
   Cash	$33,200		$12,750
   Accounts receivable	53,000		44,800
   Inventory	29,500		27,500
   Prepaid rent	2,200		6,200
   Investments (long-term)	17,600		31,800
   Property, plant, and equipment	162,000		149,450
   Accumulated depreciation	(61,600)		(56,200)
   Total assets	$235,900		$216,300
   Liabilities and Equity:
   Accounts payable	$16,900		$19,500
   Interest payable	3,500		4,800
   Wages payable	9,600		7,100
   Income taxes payable	5,500		3,600
   Notes payable	30,400		53,000
   Common stock	100,000		68,500
   Retained earnings	70,000		59,800
   Total liabilities and equity	$235,900		$216,300

   Additional Information:

   1. Net income for 2019 was $19,200.
   2. Cash dividends of $9,000 were declared and paid during 2019.
   3. Long-term investments with a cost of $28,600 were sold for cash at a gain of $4,100. Additional long-term investments were purchased for $14,400 cash.
   4. Equipment with a cost of $14,800 and accumulated depreciation of $13,500 was sold for $3,800 cash. New equipment was purchased for $27,350 cash.
   5. Depreciation expense was $18,900.
   6. A principal payment of $22,600 was made on long-term notes.
   7. Common stock was sold for $31,500 cash.

   Required:

   Prepare a statement of cash flows for Erie, using the indirect method to compute net cash flow from operating activities. Use a minus sign to indicate any decreases in cash or cash outflows. If an answer is zero, enter "0".

   Erie Company
   Statement of Cash Flows
   For the year ended December 31, 2019
   Cash flows from operating activities:
   Increase in income taxes payable Increase in inventory Increase in wages payable Net income Payment of dividends Proceeds from issuance of common stock		$
   Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation expense Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment Purchase of investments Repayment of long-term note	$
   Decrease in wages payable Gain on sale of investments Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment Repayment of long-term note
   Decrease in wages payable Gain on sale of equipment Proceeds from issuance of common stock Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment
   Decrease in accounts receivable Decrease in wages payable Increase in accounts receivable Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment
   Increase in accounts payable Increase in inventory Net income Payment of dividends Proceeds, sale of equipment Purchase of equipment
   Decrease in prepaid rent Decrease in wages payable Proceeds, sale of equipment Purchase of equipment Purchase of investments Repayment of long-term note
   Decrease in accounts payable Increase in accounts payable Proceeds, sale of equipment Purchase of equipment Purchase of investments Repayment of long-term note
   Decrease in interest payable Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment Purchase of investments Repayment of long-term note
   Increase in wages payable Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment Purchase of investments Repayment of long-term note
   Increase in income taxes payable Proceeds from sale of investments Proceeds, sale of equipment Purchase of equipment Purchase of investments Repayment of long-term note
   Net cash provided by operating activities			$
   Cash flows from investing activities:
   Gain on sale of equipment Increase in accounts receivable Increase in income taxes payable Increase in inventory Increase in wages payable Proceeds from sale of investments		$
   Decrease in accounts payable Decrease in interest payable Decrease in prepaid rent Depreciation expense Gain on sale of investments Purchase of investments
   Decrease in accounts payable Decrease in interest payable Depreciation expense Gain on sale of equipment Gain on sale of investments Proceeds, sale of equipment
   Decrease in prepaid rent Increase in accounts receivable Increase in income taxes payable Increase in inventory Increase in wages payable Purchase of equipment
   Net cash used for investing activities
   Cash flows from financing activities:
   Decrease in prepaid rent Depreciation expense Gain on sale of equipment Gain on sale of investments Increase in accounts receivable Payment of dividends
   Depreciation expense Gain on sale of equipment Gain on sale of investments Increase in accounts receivable Increase in income taxes payable Repayment of long-term note
   Depreciation expense Gain on sale of equipment Gain on sale of investments Increase in accounts receivable Proceeds from income taxes payable Proceeds from issuance of common stock
   Net cash used for financing activities
   Decrease in prepaid rent Depreciation expense Gain on sale of equipment Increase in income taxes payable Net increase (decrease) in cash Net loss in cash amount			$
   Cash, 1/1/2019
   Cash, 12/31/2019			$

Answer 1