information content of the cash flow data. P17-2B Gariepy Wholesale Ltd.'s comparative balance sheet at December 31, 2020, and its 2020 income statement are as follows: 23 Preparing the section of the statement-in GARIEPY WHOLESALE LTD. Balance Sheet December 31, 2020 and 2019 2020 2019 Assets Current assets Cash Accounts receivable Interest receivable Inventory Prepaid expenses Long-term investment Plant and equipment, net Land $ 188,000 370,000 14,500 343,000 18,500 50,500 422,500 212,000 $1,619,000 $ 43,000 241,500 18,000 301,000 14,000 26,000 368,000 480,000 $1,491,500 7 $ Total assets Liabilities Current liabilities Note payable, short-term Accounts payable Income tax payable Accrued liabilities Interest payable Salaries payable Long-term note payable Shareholders' Equity 67,000 234,500 69,000 41,000 18,500 4,500 237,000 $ 90,500 201,500 72,500 48,500 14,500 13,000 470,500 Common shares Retained earnings 319,500 628,000 $1,619,000 256,000 324,500 $1,491,500 Total liabilities and shareholders' equity Chapter 17 The Cash Flow GARIEPY WHOLESALE LTD. Income Statement For the Year Ended December 31, 2020 $1,327,000 402,000 925,000 $194,000 27,000 210,000 431,000 494,000 Net sales Cost of goods sold Gross margin Operating expenses Salaries expense Amortization expense Other expenses Operating income Other revenues and expenses Revenues and gains Interest revenue Expenses and losses Interest expense Loss on sale of land Income before income taxes 53,000 (30,500) (33,500) (64,000) 483,000 49,500 $ 433,500 Income tax expense Net income Other information for the year ended December 31, 2020 which may be useful includes: a. Acquired equipment by issuing a long-term note payable, $76,500, and paying $5,000 cash. b. Purchased a long-term investment for cash. c. Received cash for issuance of common shares, $40,000. d. Only cash dividends were issued during the year. e. Paid short-term note payable by issuing common shares. Required 1. Prepare Gariepy Wholesale Ltd.'s operating section of the cash flow statement for the year ended December 31, 2020, using the indirect method. All current accounts, except short-term note payable, result from operating transactions. 2. Describe how the direct method would differ from the partial statement you cre- ated in Requirement 1