CHECK FIGURE: Net cash inflow from operating activities = $160,300

Required

Use the Western Environmental Inc. information given below to prepare a statement of cash flows for the year ended June 30, 2020, using the indirect method

. a. A note is retired at carrying value.

b. The only changes affecting retained earnings during 2020 are profit and cash dividends paid.

c. New equipment is acquired during 2020 for $73,980

. d. The profit on sale of equipment costing $61,980 during 2020 is $3,600 Page 1080

e. Prepaid expenses and wages expense affect other expenses on the income statement

f. All sales and purchases of merchandise were on credit.

Western Environmental Inc.

Income Statement For Year Ended June 30, 2020

Sales...$792,000

Cost of goods sold.............480,000

Gross profit..............$312,000

Operating expenses:

Depreciation expense. $70,380

Other expenses..........80,460

Total operating expenses.......150,840

Profit from operations.. ..........$161,160

Gain on sale of equipment.. ....3,600

Profit before taxes............... $164,760

Income taxes.....................61,160

Profit ................................$103,600

Western Environmental Inc.

Comparative Balance Sheet Information June 30 2020 2019

2020.2019

Cash.$ 92,160.$ 47,000

Accounts receivable (net).... 102,000.75,600

Inventory...80,220116,220

Prepaid expenses.6,540.6,300

Equipment.162,000.150,000

Accumulated depreciation....34.800.18,000

Accounts payable.32,40039,600

Wages payable.9,60020,400

Income taxes payable.2,9404,380

Notes payable (long-term).....54,000.90,000

Common shares.282,000.222,000

Retained earnings27,180.740