CES Question 1 The following are the financial statements of Ivanhoe Company. IVANHOE COMPANY Balance Sheet December 31 Assets 2021 2020 Cash $30,400 $16,000 Accounts receivable 24,000 11,200 Inventory 21,600 16,000 Equipment 48,000 62,400 Accumulated depreciation-equipment (23,200) (19,200) Total $100,800 $86,400 Liabilities and Shareholders' Equity Accounts payable $19,200 $12,000 Income taxes payable 5,600 6,400 Notes payable 21,600 26,400 Common shares 14,400 11,200 Retained earnings 40,000 30,400 Total $100,800 $86,400 IVANHOE COMPANY Income Statement For the Year Ended December 31, 2021 Sales $193,600 Cost of goods sold 140,000 Gross profit 53,600 Operating expenses 19,200 Income from operations 34,400 Interest expense 2,400 Income before income taxes 32,000 Income tax expense 6,400 Profit $25,600 Additional Information: 1. Dividends declared and paid were $16,000. Ivanhoe reports under ASPE. 2 During the year, equipment was sold for $6,800 cash. This equipment cost $14,400 originally and had a carrying value of $6,800 at the time of sale. 3. All depreciation expense, $11,600, is in the operating expenses. All sales and purchases are on account. (a) Prepare a statement of cash flows using the Indirect method. (Show amounts that decrease cash flow with either a - signe.g.-15,000 or in par IVANHOE COMPANY Cash Flow Statement - Indirect Method Adjustments to reconcile profit to > > ES