CHINATOWN INDUSTRIES LTD.

Income Statement

Year Ended December 31, 2021

Revenue$920,000

Expenses

Cost of goods sold$ 493,500

Salaries 189,000

Depreciation expense25,000

Other operating expenses73,500

Interest expense13,000

Income taxes18,000

812,000

Profit$108,000

CHINATOWN INDUSTRIES LTD.

Balance Sheet

December 31

20212020

Assets

Cash $ 14,000$10,000

Accounts receivable 29,00024,000

Inventory 13,50017,000

Prepaid expenses 2,0002,000

Land 250,000250,000

Building and equipment 497,000422,000

Accumulated depreciation (150,000)(125,000)

Total assets $ 655,500$600,000

Liabilities and Shareholders' Equity

Accounts payable $ 25,900 $22,400

Taxes payable 1,000 3,000

Interest payable 1,500 2,500

Salaries payable 8,000 5,000

Long-term debt 234,000 260,000

Common shares 120,000 100,000

Retained earnings 265,100 207,100

Total liabilities and shareholders' equity $ 655,500 $600,000

Additional information:

1.No new long-term debt was taken during the year

.2.New equipment was purchased, and none was sold.

3.Common shares were issued for cash.

4.Cash dividends were paid to common shareholders.

Instructions

Make the cash flow statement for 2021, using the indirect method.