Aires Corporation Comparative Balance Sheets 31, 2020 and 2019 

Assets 2020 2019 Cash Replacement 

Cash $21,000 $54,000 

Receivable (Net) 421,000 480,000 340,000 

prepaid expenses 17,000 15,000 

long-term investments 70,000 80,000 

land 400,000 300,000 80,000 

land 400,000 300,000 

equipment 1,730,000 1.590,000 

dedicated equipment ( 610,000) (600,000) 

Patents 40,000 50,000 

Total Assets $2,399,000 $2,309,000 

liability accounts 328,000 $ 335,000 

accrued liabilities 171,000 170,000 170,000 

income tax payable 410,000 $1,011,000 $1,2,000 $1,30,000 0 $1,2,000 $ 130,000 0 $ 1,2,000 $ 130,000 0 $ 1,2,000 $ 130,000 0 $ 1,2,000 $ 130,000 0 $ 1,2,000

Equity Equity $ 800,000 $ 600,000 

Additional Paid-in Capital 152,000 152,000 

Accumulated Earnings 386,000 318,000 

Total Shareholder's Equity $1,338,000 $1,070,000 

Total Debt and Shareholder $2,309,000 $2,309,000 $2,309,000 

Aires Corporation income statement ended in the year ended. 138,000 

Income from operations $198,700 

Other income/(expenses): Gain from the sale of equipment $3,000 

Loss from the sale of investment (2000) 

Interest income 6,000 7,000 

Income before tax 205,700 $ 

Income tax 62,700 Net income 143,000 $ 

a) Issuance of long-term bonds payable were exchanged for computer equipment for $130,000. 

b) Bought computer equipment for $90,000. 

c) Investments sold for $10,000 that cost $8,000 (Hint: Calculate gain or loss) 

d) For $23,000, sold equipment costing $80,000 with $60,000 accumulated depreciation (Hint: Calculate gain or loss) 

e) f) 290. Repayment of $ 000 par-seen bonds. 

g) Declared and paid $75,000 dividends. 

h) Issued 20,000 ordinary shares with a nominal value of $10 per share.

 i) Paid $100,000 for land planned for a new factory site.

Required: 

a) Prepare a cash flow statement using the indirect method. Include a schedule of non-cash investment and financing transactions, if applicable. 

b) Calculate  Ratio Response Free Cash Flow