ADDITIONAL INFORMATION:

●		Depreciation expense is included in “operating expenses.” All accounts payable transactions were related to the purchase of inventory.
●		During the year, a piece of equipment that originally cost $53,100 was sold for cash. The equipment was 70% depreciated at the time of the sale.
●		Long-term investments were purchased for cash during the year.

Prepare a statement of cash flows, in good form, for Vaughn Inc., using the direct method. Vaughn Inc. follows ASPE.
 

Vaughn Inc. reported the following information at the end of its 2019 fiscal year. Vaughn Inc. Statement of Financial Position As at April 30 Assets Cash Accounts receivable Inventory Prepaid operating expenses Long term investments Equipment Less: Accumulated depreciation Liabilities and Shareholders Equity Accounts payable Income tax payable Bonds payable Common shares Retained earnings 2020 208,000 115,000 112,000 22,000 186,000 1,244,000 (369,000) 1,518,000 52,000 26,000 676,000 290,000 474,000 1,518,000 2019 149,000 94,000 247,000 13,000 83,000 1,162,000 (377,000) 1,371,000 66,000 25,000 765,000 249,000 266,000 1,371,000 Vaughn Inc. Income Statement For the year ended April 30, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Gain on disposal of equipment Income before income tax Income tax expense Net income 1,144,000 685,000 459,000 225,000 234,000 4,900 3,700 232,800 18,650 $214,150