Carla's Custom Clothing (CCC) sells branded clothing to resorts and corporations. The company's comparative financial statements are presented below. CARLA'S CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION Current Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets December 31 2020 2019 159,000 78,100. 30,000 23,700 73,000 43,800 9,600 2,800 271,600 148,400 Property and equipment Property and equipment 100,000 137,000 Less: Accumulated depreciation 53.900 72,700 Net property and equipment 46,100 64,300 TOTAL ASSETS $317,700 $212,700 Current liabilities Accounts payable 25,100 32,000 Salaries payable 9,400 5,000 Interest payable 5,300 8,300 Total current liabilities 39.800 45,300 Loan payable 121,000 91,000 Total liabilities 160,800 136,300 Shareholders' equity Common shares 19,000 1,500 Shareholders' equity Common shares Retained earnings Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY CARLA'S CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31 2020 2019 Sales revenue 909,000 773,000 Cost of sales 662,000 552,000 Gross margin 247,000 221,000 Expenses Salary expense 126,000 113,000 Interest expense 5,000 2,100 Other expenses 8,300 6,100 Depreciation expense 10,000 12.200 Total expenses 149,300 133,400 Operating income 97.700 87,600 Loss disposal of equipment 1,200 1,000 Income tax expense 24,425 18,300 Net income 72,075 68,300 19,000 1,500 137,900 74,900 156,900 76,400 $317,700 $212,700 Following is additional information concerning CCC's transactions during the year ended December 31, 2020: Following is additional information concerning CCC's transactions during the year ended December 31, 2020: Equipment costing $35,000 was purchased by paying $24,000 cash and issuing 400 common shares. Equipment costing $72,000 that was purchased at the beginning of 2019 was sold at the end of 2020 for $42,000. Straight- line depreciation had been used with an expected asset life of 5 years and a residual value of $0. The "other expenses" relate to prepaid items. In order to supplement its cash, CCC increased its bank loan by $30,000. . Cash dividends of $9,075 were paid at the end of the fiscal year. Cost of sales includes $184,000 of direct labour costs. Prepare a statement of cash flows for CCC for the year ended December 31, 2020, using the indirect method. CCC follows ASPE. (Show amounts that decrease cash flow with either a-sign eg.-15,000 or in parenthesis e.g. (15,000).) CARLA'S CUSTOM CLOTHING STATEMENT OF CASH FLOWS Add/(Deduct) non-cash items: < > Cash Flows from Investing Activities Decrease in Cash Opening Cash Balance Net Cash Used by Investing Activities Net Cash Used by Financing Activities Cash Flows from Operating Activities Net Cash Provided by Investing Activities CARLA'S CUSTOM CLOTHING STATEMENT OF CASH FLOWS Net Cash Provided by Financing Activities Net Cash Provided by Operating Activities Closing Cash Balance Cash Flows from Financing Activities Net Cash Used by Operating Activities Increase in Cash Increase in Salaries Payable Depreciation Expense Increase in Interest Payable Decrease in Inventory Decrease in Prepaid Expenses Issuance of Common Shares Net Income/(Loss) Decrease in Salaries Payable Decrease in Bank Loan Payable Decrease in Interest Payable Increase in Accounts Payable Gain on Disposal of Equipment Loss on Disposal of Equipment Increase in Inventory Decrease in Accounts Receivable Decrease in Accounts Payable Increase in Prepaid Expenses Proceeds from Sale of Equipment Increase in Accounts Receivable