and direct met P17.11A (LO 2, 3) AP Presented below is the comparative balance sheet for company reporting under ASPE, at December 31, 2021, and 2020: DIATESSARON INC. Balance Sheet December 31 Increase 2020 Assets Cash Accounts receivable Inventory Long-term investment Property, plant, and equipment Accumulated depreciation 2021 $ 67,000 101,000 205,000 101,500 535,000 (162,500) $847,000 $ 98,000 (31,000) 75,000 21 000 155,500 49,500 o 101, Soo 460,000 75,000 (140,000) 22,500 $648,500 Liabilities and Shareholders' Equity Accounts payable Dividends payable Income tax payable Long-term notes payable Common shares Retained earnings $ 57,500 6,000 14,000 25,000 630,000 114,500 $847,000 $ 47,000 10,500 0 12000 15,000 (1000) 0 525,000 61,500 $648,500 29000 DIATESSARON INC. Income Statement Year Ended December 31, 2021 $663,000 432,000 231.000 $147,500 3,000 150,500 80.500 Sales Cost of goods sold Gross profit Operating expenses Loss on sale of equipment Profit from operations Interest expense Interest revenue Profit before income tax Income tax expense Profit 3,000 (4,500) (1.500) 82,000 14.000 $ 68,000 Additional information: 1. Cash dividends of $15,000 were declared. 2. A long-term investment was acquired for cash at a cost of $101,500. 3. Depreciation expense is included in the operating expenses. 4. The company issued 10,500 common shares for cash on March 2, 2021. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment. 5. Equipment that originally cost $30,000 was sold during the year for cash. The equipment had a carrying value of $9,000 at the time of sale. 6. The company issued a note payable for $28,000 and repaid $3,000 by year end. 7. All purchases of inventory are on credit. 8. Accounts payable is used only to record purchases of inventory. Instructions a. Prepare a cash flow statement for the year using the indirect method. h. Prenare a cash flow statement for the year using the direct method