B/S	Dec. 31 2019	Dec. 31 2018
Cash	$ 9,780	$ 4,840
Short-term investment	12,800	11,400
A/R	7,580	4,300
Inventory	12,250	9,285
Prepaid expenses	1,840	2,600
PPE	27,000	24,250
Accumulated depreciation	(5,000)	(5,200)
Total	$66,250	$51,475
A/P	$ 9,300	$ 7,730
Accrued liabilities	1,150	700
Bank loan payable	11,000	15,000
Common shares	20,000	17,500
R/E	24,800	10,545
Total	$66,250	$51,475

I/S for 2019
Sales		$49,278
CGS		18,546
Gross profit		30,732
Operating expenses		11,641
Operating income (EBIT)		19,091
Other revenues and expenses:
Unrealized gain on ST-investment $1,400
Interest expense (473)		927
Income before tax		20,018
Tax expense		4,500
NI		$15,518

Additional information:

Prepaid expenses and accrued liabilities relate to operating expenses.

An unrealized gain on ST-investment of $1,400 was recorded.

A/P relates to purchases of inventory.

Operating expenses include $4,650 of depreciation expense and a $750 loss on disposal of equipment.

Required:

a.

(i) Prepare cash flows from operations, CFO using the INDIRECT method. (9 marks)

(ii) Calculate the cash paid for operating expenses. (6 marks)

b.

(10 marks)

Complete the table below.

	2019	2018
OA
OL
NOA

Calculate FCF = NOPAT Change in NOA.