Brentwood Bay Inc.’s comparative balance sheet at September 30, 2020, is shown below:

Other information for the year ended September 30, 2020 that may be needed includes

a. Acquired equipment by issuing long-term note payable, $89,200, and paying $16,000 cash.

b. Paid long-term note payable, $122,800.

c. Received $207,600 cash for issuance of common shares.

d. Paid cash dividends, $217,200.

e. Acquired equipment by issuing short-term note payable, $40,000.

f. Net income, $349,600

g. Amortization expense, $34,000

h. Gain on sale of land, $43,600

Required

1. Prepare Brentwood Bay Inc.’s operating section of the cash flow statement for the year ended September 30, 2020, using the indirect method.

2. Describe how the direct method would differ from the partial statement you created in Requirement 1.

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BRENTWOOD BAY INC. Balance Sheet September 30, 2020 and 2019 Assets 2020 2019 Current assets Cash $ 194,800 $ 96,400 Accounts receivable 167,600 164,000 Interest receivable 16,400 11,200 Inventory 486,800 467,600 Prepaid expenses 34,400 37,200 Long-term investments 204,400 55,200 Plant and equipment, net 527,600 416,400 Land 188,400 297,200 Total assets $1,820,400 $1,545,200 Liabilities Current liabilities Notes payable, short-term 40,000 Accounts payable 247,200 281,200 Income tax payable 47,200 46,400 Accrued liabilities 71,600 116,400 Interest payable 18,000 12,800 Salaries payable 6,000 4,400 Long-term note payable 492,000 525,600 Shareholders' Equity Common shares 543,600 336,000 Retained earnings 354,800 222,400 Total liabilities and shareholders' equity $1,820,400 $1,545,200