I need to reconcile these to cash using the INDIRECT method

PROBLEM 1: The 2016-2017 and 2017-18 comparative balance sheet and 2018 income statement for CHASE INDUSTRIES appear below: CHASE INDUSTRIES Comparative Balance Sheet January 31 2017 Assets Cash Accounts receivable Inventories Prepaid Supplies Expense Investments Plant assets Accumulated depreciation 41,000 35,000 75,000 53,000 120,000 132,000 19,000 25,000 100,000 75,000 325,000 250,000 (65,000) (60,000) S615,000 $510,000 Total Liabilities and Stockholders\' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings 93,000 $ 75,000 29,000 24,000 120,000 160,000 275,000 170,000 98,000 81,000 $615,000 $510,000 Total CHASE INDUSTRIES Income Statement For the Year Ended January 31, 2018 Sales Less: $450,000 Cost of goods sold Operating expenses (including depreciation) and $300,000 Income taxes 97,000 18,000 3.000 32000 Interest expense Loss on sale of plant assets 418.000 Net income Additional information: 1. New plant assets costing $100,000 were purchased for cash in 2017-18 fiscal year. 2. Old plant assets costing $25,000 were sold for $10,000 cash when book value was $13,000. 3. Bonds with a face value of $40,000 were converted into $40,000 of common stock. 4. A cash dividend of $15,000 was declared and paid during the year 5. Accounts payable pertain to merchandise purchases. 6. Depreciation expense for the year was

Solution

Cash flow Statement Cash flow from operating activities: Net income for the year 32000 Adjustment for reconciliation Depreciation (60000-12000-65000) 17000 Loss on sale of equipment 3000 Increase in Accounts receivabe -22000 Decrease in Inventories 12000 Decrease in Prepaid supplies expense 6000 Increasse in Accounts payable 18000 Increase in Accrued expense payable 5,000 Net cash provvided from operating activities 71,000 Cash flows from Investing activities Purchase of plant -100000 Sale of plant 10000 Purchase of investment -25000 Net cash used in Investing activities -115000 Cash flows from Financing activities: issue of Common Stock 65000 Dividend paid -15000 Net cash provided from Financing activities 50000 Net increase in cash 6000 Beginning balance in cash 35000 Ending balance in cash 41000