Financial statements - Income statement for 20X4 and Comparative Balance Sheet for diving equipment manufacturer Lincoln Corp for December 31, 20X4 and 20X3 Lincoln Corp. - Income Statement as of December 31st, 20X4 Revenue $5,000 Cost of Goods Sold $3,200 Gross Profit $1,800 Operating expenses $1,350 Operating Profit $ 450 Loss on sale of equipment $ 20 Income tax expense $ 180 Profit for 2012 $ 250 Lincoln Corp. Balance Sheet - December 31 20X4 20X3 Assets: Cash Accounts Receivable $ 2,350 450 $ 1,800 1,000 Inventory Prepaid expenses Equipment 800 700 40 2,500 Accumulated Depreciation Total Assets Liabilities & Shareholders' Equity Accounts Payable Operating expenses payable Income Taxes Payable (1,350) 80 1,500 (1,000) $ 4,790 $ 4,080 Dividends Payable Long term notes Payable Common Shares Retained Earnings Total Liabilities & Shareholders' Equity $ 680 $ 350 210 100 120 0 50 100 300 70 2,500 2,500 930 960 $ 4,790 $ 4,790 Additional Information for Lincoln Corp: 1) Operating expenses for 20X4 included depreciation for $500 2) Accounts payable relate exclusively to the purchase of inventory 3) Machine with a historical cost of $200 was sold at a loss of $20 4) A new machine was purchased during the year for $1,200 5) Dividends were declared 6) Long term notes payable were issued What is the adjustment in Income Tax payable to reconcile profit when using the indirect method is? Multiple Choice Income tax expense and payable are not reported in the cash flow statement Cash inflow for $120 No change None of the other alternatives are correct Cash outflow for $120