Isabelle Romeo is the accountant for Rockworks Inc., a landscaping design and installation company in Nova Scotia. As part of the year-end reporting process, she has been asked to prepare the company's cash flow statement for the year ended December 31, 2020, using the indirect method in accordance with ASPE. Isabelle has pulled together the following documents to help her with her task: 0 Appendix I, balance sheet 0 Appendix II, income statement 0 Appendix III, excerpts from the notes to the financial statements Complete the task in the Excel Task file. Appendix I: Balance sheet Rockworks Inc. Balance sheet As at December 31, 2020 2020 2019 Current year Prior year Draft - prepared by Audited management ASSETS Current assets: Cash $12,030 $88, 175 Accounts receivable 1,899,010 1,722,385 Inventory 1,419,530 1,478, 160 Prepaid expenses 133,720 153,055 3,464,290 3,441,775 Property, plant, and equipment (net) (Note 3) 4,201,250 4,821,775 $7,665,540 $8,263,550 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Due to related party (Note 4) $212,500 $1, 134,055 Accounts payable 1,673,600 1,978,965 Income taxes payable 2,010 56,000 Current portion of term bank loan 140,000 40,000 2,028, 110 3,309,020 Term bank loan 3,290,000 3,430,000 5,318, 110 6,739,020 SHAREHOLDERS' EQUITY Share capita 65,000 65,000 Retained earnings 2,282,430 1,459,530 2,347,430 1,524,530 $7,665,540 $8,263,550Appendix II: Income statement Rockworks Inc. Income statement For the year ending December 31, 2020 2020 2019 Current year Prior year \"Elan'g'iif by MW Sales $13,806,375 $11,025,150 Cost of sales 7,981,190 4,398,290 Gross prot 5,825,185 6,626,860 Expenses Advertising and promotion 135,610 203,315 Amortization 1,120,525 1,249,330 Automobile 171,490 175,510 Bad debts 55,300 70,020 Insurance 123,705 100,610 Interest 165,000 178,000 Ofce 46,335 47,110 Professional fees 21,105 75,300 Property taxes 64,475 55,100 Rent 180,000 180,000 Repairs and maintenance 105,714 52,675 Salaries and wages 2,462,978 2,541,280 Travel 45,615 45,290 Utilities 93,980 89,430 4,791,832 5,062,970 Operating income 1,033,353 1,563,890 Other income Gain on the sale of equipment 150,000 0 Income before taxes 1,183,353 1,563,890 Income taxes 227,345 238,616 Net income 956,003 1,325,274 Appendix Ill: Excerpts from the notes to the financial statements Note 3 - Capital assets 2020 2019 Accumulated Cost amortization Net book value Net book value Land 250,000 250,000 Building 250,000 250,000 Major equipment 4,388, 150 1,563,499 2,824,651 3,895, 176 Computers and software 2,053,250 1, 176,651 876,599 926,599 6,941,400 2,740, 150 4,201,250 4,821,775 During the year the company sold excavating equipment with a net book value of $0 for $150,000. The company also acquired a 12-acre piece of land for $250,000 with the intention of moving its operations to that site in 2022. Construction of a new building was started on the land during the year but will not be completed until 2022. Note 4 - Due to related party Amounts payable to the related party are used to manage net working capital needs and arise due to purchases from the related party
