Additional Problem 10

Culver Inc. is a major retailer of road bicycles and a promoter of riding bicycles to work, both to save the environment and improve physical fitness. Financial statements for Culver are presented below.

STATEMENT OF FINANCIAL POSITION December 31
Current Assets			2021			2020
	Cash		56,550			20,900
	Accounts receivable		25,350			10,500
	Inventory		31,100			16,100
	Prepaid expenses		15,750			10,750
	Total current assets		128,750			58,250
Property and Equipment
	Property and equipment		160,800			150,800
	Less: Accumulated depreciation		78,900			70,000
	Net property and equipment		81,900			80,800
TOTAL ASSETS			$210,650			$139,050
Current Liabilities
	Accounts payable		11,900			15,800
	Salaries payable		10,750			8,750
	Interest payable		2,500			3,500
	Total current liabilities		25,150			28,050
	Loan payable		100,800			60,800
Total Liabilities			125,950			88,850
Shareholders Equity
	Common shares		10,750			1,100
	Retained earnings		73,950			49,100
	Total shareholders equity		84,700			50,200
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			$210,650			$139,050

INCOME STATEMENT For the Years Ended December 31
				2021		2020
Sales revenue				610,050		500,000
Cost of sales				416,000		350,000
Gross margin				194,050		150,000
Expenses
Salary expense				136,000		125,000
Interest expense				3,500		2,400
Other expenses				6,000		3,000
Depreciation expense				14,900		8,000
Total expenses				160,400		138,400
Operating income				33,650		11,600
Gain on disposal of equipment				1,950		-
Income tax expense				6,400		1,972
Net income				$29,200		$9,628

The following is additional information concerning Culvers transactions during the year ended December 31, 2021:

		Equipment costing $40,000 was purchased by paying $34,400 cash and issuing 100 shares.
		Equipment costing $30,000 that was purchased at the beginning of 2020 was sold at the end of 2021 for $25,950. Straight-line depreciation had been used with an expected asset life of 10 years and a residual value of $0.
		The other expenses relate to prepaid items.
		In order to supplement its cash, Culver borrowed an additional $40,000 and issued an additional 100 shares.
		Cash dividends of $4,350 were paid at the end of the fiscal year.
		Cost of sales includes $125,000 of direct labour costs.

Prepare a statement of cash flows for Culver for the year ended December 31, 2021, using the indirect method. Culver follows ASPE. Include any note disclosure on non-cash financing and investing transactions. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)