Comparative Balance Sheet Information June 30 2020 2019 Cash $ 91,960 $ 46,800 Accounts receivable (net) 101,000 75,400 Inventory 80,210 116,210 Prepaid expenses 6,530 6,290 Equipment 161,000 149,000 Accumulated depreciation 34,600 17,000 Accounts payable 32,200 39,400 Wages payable 9,400 20,200 Income taxes payable 2,930 4,370 Notes payable (long-term) 53,000 89,000 Common shares 281,000 221,000 Retained earnings 27,570 2,730 Western Environmental Inc. Income Statement For Year Ended June 30, 2020 Sales $ 791,000 Cost of goods sold 479,800 Gross profit $ 311,200 Operating expenses:

Comparative Balance Sheet Information
	June 30
	2020	2019
Cash	$	91,960		$	46,800
Accounts receivable (net)		101,000			75,400
Inventory		80,210			116,210
Prepaid expenses		6,530			6,290
Equipment		161,000			149,000
Accumulated depreciation		34,600			17,000
Accounts payable		32,200			39,400
Wages payable		9,400			20,200
Income taxes payable		2,930			4,370
Notes payable (long-term)		53,000			89,000
Common shares		281,000			221,000
Retained earnings		27,570			2,730

Western Environmental Inc.
Income Statement
For Year Ended June 30, 2020
Sales				$	791,000
Cost of goods sold					479,800
Gross profit				$	311,200
Operating expenses:
Depreciation expense	$	70,370
Other expenses		80,450
Total operating expenses					150,820
Profit from operations				$	160,380
Gain on sale of equipment					3,400
Profit before taxes				$	163,780
Income taxes					60,380
Profit				$	103,400

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. (List any deduction in cash and cash outflows as negative amounts.)

1. A note is retired at carrying value.
2. The only changes affecting retained earnings during 2020 are profit and cash dividends paid.
3. New equipment is acquired during 2020 for $73,370.
4. The profit on sale of equipment costing $61,370 during 2020 is $3,400.
5. Prepaid expenses and wages expense affect other expenses on the income statement.
6. All sales and purchases of merchandise were on credit.