AP5-10B (Preparation of statement of cash flows) Medicinal Plant Ltd. (MPL) is a privately held distributor of medicinal marijuana tablets. The Vancouver Island-based company is well established and is currently managed by its founder, Dylan Roberts. The company's financial statements are presented below, together with some additional information. MEDICINAL PLANT LTD. Statement of Income As at December 31, 2020 $45,000,000 Sales revenue Cost of goods sold Gross profit 29,500,000 15,500,000 Wages expense 1,800,000 Depreciation expense 1,500,000 Interest expense 1,350,000 Income tax expense 1,600,000 Gain on sale of equipment _(300,000) $ 9,550,000 Net income MEDICINAL PLANT LTD. Statement of Financial Position As at December 31 2020 2019 Assets Current assets: Cash Accounts receivable (net) Inventory Total current assets $ 5,600,000 $6,400,000 16,000,000 13,600,000 20,000,000 17,000,000 41,600,000 37,000,000 45,000,000 42,000,000 _(8,750,000) _(9,250,000) $77,850,000 $69,750,000 Equipment Accumulated depreciation, equipment Total assets Liabilities and shareholders' equity Current liabilities: Accounts payable Wages payable Total current liabilities $ 7,750,000 1,800,000 9,550,000 24,000,000 $8,000,000 2,000,000 10,000,000 28,000,000 Bonds payable Common shares 12,000,000 8,000,000 Retained earnings 32,300,000 23,750,000 Total liabilities and shareholders' equity $77,850,000 $69,750,000 Additional information: MEDICINAL PLANT LTD. Other Selected Financial Information for the Year Ended December 31, 2020 1. Total sales in 2020 were consistent with the prior years, and the company's dividend policy has remained consistent for the past five years. 2. During 2020, MPL sold a piece of equipment for $2.5 million. The equipment had originally cost $4.2 million and had a net carrying amount of $2.2 million at the time of sale. 3. On August 1, 2020, MPL's board of directors approved the retirement of bonds with a carrying amount of $4.0 million through the issuance of common shares. Required MPL's management shareholders have asked you to prepare the statement of cash flows for MPL using either the direct or indirect method for determining cash flows from operating activities. Prepare the statement for them