Exercise 22-14 (a) (direct method) Ayayal Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: AYAYAI INC. Comparative Statement of Financial Position December 31 2020 2019 Cash $52.610 $25,010 Accounts receivable 58,000 51,010 Inventory 40.000 60.010 Prepaid rent 5.020 4,010 Equipment 156,020 130.010 Accumulated depreciation equipment (35.020) (25.010) Goodwill 20.000 52.000 Total assets $296.630 $297,040 Accounts payable $46,020 Income tax payable 4.000 Salaries and wages payable 8,010 Short-term loans payable 8.000 Long-term loans payable 60.000 Common shares 130.000 Retained earnings 40,600 Total liabilities and shareholders' equity $296,630 $40.010 6,010 4.010 10,010 71.000 130.000 36,000 297,040 AYAYAI INC Income Statement Year Ending December 31, 2020 Sales revenue $340,100 Cost of goods sold 165,000 Gross margin 175,100 Operating expenses 120.000 Operating income 55.100 Interest expense $11,500 AYAYAI INC Income Statement Year Ending December 31, 2020 Sales revenue $340,100 Cost of goods sold 165.000 Gross margin 175,100 Operating expenses 120.000 Operating income 55,100 Interest expense $11,500 Impairment losgoodwill 32,000 Gain on disposal of equipment (2.100) 41,400 Income before income tax 13700 Income tax expense 4,100 Net Income $9,600 Additional information: 1. Dividends on common shares in the amount of $5,000 were declared and paid during 2020. 2. Depreciation expense is included in operating expenses, as is salaries and wages expense of $69,500. 3. Equipment with a cost of $22,000 that was 70% depreciated was sold during 2020. Ayayai Inc Statement of Cash Flows (Direct Method)