Reference no: EM133090733

Question - Walnut Company has provided selected financial statements for the two years 2020 and 2021. The company's fiscal year ends on December 31.

	2021	2020
Cash	$34,000	$10,000
Accounts Receivable	27,000	25,000
Inventory	30,000	35,000
Long-term Investment in shares	26,000	20,000
Land	29,000	38,000
Machinery	92,000	90,000
Less: Accumulated Amortization	(18,000)	(15,000)
Total Assets	$220,000	$203,000
Accounts payable	$28,000	$36,000
Income taxes payable	8,000	15,000
Notes payable (Long-term)	48,000	45,000
Share capital	100,000	75,000
Retained earnings	36,000	32,000
Total Liabilities and Shareholders' Equity	$220,000	$203,000

A summary income statement for the year ended December 31, 2021 follows:

Revenue	$192,000
Cost of goods sold	(78,000)
Gross profit	114,000
Operating expenses (includes $7,000 amortization expense)	(58,000)
Gain on sale of long-term investment	5,000
Loss on sale of machinery	(7,000)
Income before income taxes	54,000
Income tax expense	(11,000)
Net income	$43,000

Additional information (transactions occurred during 2021):

Old machinery was sold at a loss of $7,000

New machinery of $25,000 was purchased by using the cash proceeds from issuing shares.

Some long-term investments were sold for cash at gain of $5,000. $15,000 worth of new long-term investments were purchased using cash during 2021.

Dividends were declared and paid during 2021.

Additional notes were issued for cash.

Vacant land was sold for cash.

Accounts payable relates solely to purchases of merchandise inventory.

Required - Prepare cash flow statement using indirect and direct method?