E13.7 (LO 2, 3, 4) The comparative unclassified statement of financial position for Puffy Ltd. follows: Puffy Ltd. Statement of Financial Position December 31 2021 2020 Assets Cash Accounts receivable Inventory Estimated inventory returns Long-term investments Equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable Refund liability Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders' equity $53,000 $ 22,000 80,000 76,000 180,000 186,000 5,000 3.000 70,000 100,000 265,000 200,000 (66,000) (32,000) $587,000 $555.000 Additional information pertaining to 2021: 1. Net income was $115,000. 2. Sales were $978,000. 3. Cost of goods sold was $751,000. 4. Operating expenses were $43,000, exclusive of depreciation expense. 5. Depreciation expense was $34,000. 6. Interest expense was $14,000. 7. Income tax expense was $26,000. 8. Long-term investments were sold at a gain of $5,000. These investments are carried at their cost so gains and losses on these investments are recorded only when the investments are sold. 9. No equipment was sold during the year. 10. $50,000 of the bank loan was repaid during the year. 11. Common shares were issued for $25,000 Instructions Prepare a statement of cash flows using the indirect method. Prepare and evaluate statement of cash flows-indirect method. $ 29,000 $ 41,000 10,000 6,000 150,000 200,000 199,000 174,000 199,000 134,000 $587,000 $555,000