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Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2020....

Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2020.

SAGE INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2020 AND 2019

12/31/20

12/31/19

Cash

$6,100

$6,900

Accounts receivable

62,500

51,000

Short-term debt investments (available-for-sale)

34,800

18,100

Inventory

39,600

60,200

Prepaid rent

4,900

4,000

Equipment

154,500

130,100

Accumulated depreciation—equipment

(34,800

)

(25,300

)

Copyrights

46,300

50,400

Total assets

$313,900

$295,400

Accounts payable

$46,000

$40,200

Income taxes payable

4,000

6,000

Salaries and wages payable

8,100

4,000

Short-term loans payable

8,000

10,000

Long-term loans payable

59,700

69,000

Common stock, $10 par

100,000

100,000

Contributed capital, common stock

30,000

30,000

Retained earnings

58,100

36,200

Total liabilities & stockholders’ equity

$313,900

$295,400

SAGE INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2020

Sales revenue

$339,075

Cost of goods sold

175,000

Gross profit

164,075

Operating expenses

119,900

Operating income

44,175

Interest expense

$11,300

Gain on sale of equipment

2,000

9,300

Income before tax

34,875

Income tax expense

6,975

Net income

$27,900


Additional information:

1. Dividends in the amount of $6,000 were declared and paid during 2020.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealized gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2020.


Prepare a statement of cash flows using the direct method. (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).)

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