Current Attempt in Progress Bridgeport's Custom Clothing (BCC) sells branded clothing to resorts and corporations. The company's comparative financial statements are presented below. BRIDGEPORT'S CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION December 31 Current Assets 2020 2019 Cash 162,000 78,300 Accounts receivable 31,000 26,300 Inventory 70,000 44,500 Prepaid expenses 9,600 2,900 Total current assets 272,600 152,000 Property and equipment Property and equipment 104,000 141,000 Less: Accumulated depreciation 59,000 56,800 Net property and equipment 45,000 84,200 TOTAL ASSETS $317,600 $236,200 Current liabilities Accounts payable 23,800 32,200 Salaries payable 8,600 4,800 Interest payable 4,700 7,900 Total current liabilities 37,100 44,900 Loan payable 121,000 113,000 Total liabilities 158,100 157,900 Shareholders' equity Common shares 20,500 1,600 Retained earnings 139,000 76,700 Total shareholders' equity 159,500 78,300 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $317,600 $236,200 BRIDGEPORT'S CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31 2020 2019 Sales revenue 890,000 719,000 Cost of sales 614,000 529,000 Gross margin 276,000 190,000 Expenses Salary expense 100,000 92,000 Interest expense 5,100 2,000 Other expenses 8,000 5,900 Depreciation expense 31,000 31,700 Total expenses 144,100 131,600 Operating income 131,900 58,400 Loss on disposal of equipment 3,200 1,000 Income tax expense 32,975 18,000 Net income 95,725 39,400 Following is additional information concerning BCC's transactions during the year ended December 31, 2020: . Equipment costing $35,000 was purchased by paying $26,000 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 $40,000. 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, BCC increased its bank loan by $8,000. Cash dividends of $33,425 were paid at the end of the fiscal year. Cost of sales includes $172,000 of direct labour costs. . Bridgeport's Custom Clothing Statement of Cash Flows