Larkspur Inc.s CFO has just left the office of the company president after a meeting about the draft SFP at April 30, 2020, and income statement for the year then ended. (Both are reproduced below.) Our liquidity position looks healthy, the president had remarked. Look at the current and acid-test ratios, and the amount of working capital we have. And between the goodwill write off and depreciation, we have almost $23 million of non-cash expenses. I dont understand why youve been complaining about our cash situation. The CFO turns the draft financial statements over to you, the newest member of the accounting staff, along with extracts from the notes to the financial statements.

LARKSPUR INC. Consolidated Statement of Financial Position April 30, 2020, and 2019 (in $000s)
Assets			2020			2019
Cash and 60-day treasury bills			$3,269			$3,739
Accounts receivable			23,747			18,407
Inventory			26,086			21,571
Income tax receivable			145			0
Prepaid expenses			1,400			1,615
			54,647			45,332
Investments (Note 1)			5,961			6,953
Property, plant, and equipment (Note 2)			37,336			45,700
Deferred tax asset			4,870			2,262
Intangible assetsfranchises (Note 3)			4,391			1,911
Goodwill			0			12,740
			$107,205			$114,898
Liabilities
Current
	Bank overdraft (temporary)		$ 6,900			$ 6,309
	Accounts payable and accrued liabilities (Note 4)		3,245			4,714
	Current portion of long-term debt		1,800			1,200
			11,945			12,223
Long-term debt (Note 5)			14,900			14,500
Shareholders Equity
Share capital (Note 6)			78,257			62,965
Retained earnings			2,103			25,210
			80,360			88,175
			$107,205			$114,898

Consolidated Statement of Income and Retained Earnings Year Ended April 30, 2020, and 2019 (in $000s)
Revenue			2020			2019
	Sales revenue		$89,821			$68,820
	Interest and other		1,310			446
			91,131			69,266
Expenses
	Cost of goods sold		52,800			39,504
	General and administrative		10,415			10,982
	Salaries and wages expense		26,624			24,500
	Depreciation and amortization		10,220			11,709
	Loss on impairment (goodwill)		12,740			0
	Interest		1,294			1,528
	Loss on disposal of capital assets		390			0
			114,483			88,223
Loss before equity loss and income tax			(23,352	)		(18,957	)
Investment income (loss) (Note 1)			(2,508	)		90
Loss before income tax			(25,860	)		(18,867	)
Income tax benefit			2,753			5,161
Net loss			(23,107	)		(13,706	)
Retained earnings, beginning of year			25,210			38,916
Retained earnings, end of year			2,103			25,210

Draft Notes to the Financial Statements

For the Year Ended April 30, 2020

Note 1. Investments The companys investments at April 30 are as follows (in $000s):

			2020			2019
Compuco Ltd. (fair value 2020, $4.3 million)
	Associates shares, opening balance at equity		$6,953			$6,863
	Equity income (loss)		(2,508	)		90
	Associates shares, ending balance at equity		4,445			6,953
Other investments, at amortized cost			1,516			0
			$5,961			$6,953

Note 2. Property, Plant, and Equipment Additions to property, plant, and equipment for the current year amounted to $2,290,000. Proceeds from the disposal of property, plant, and equipment amounted to $250,000. Note 3. Intangible AssetsFranchises Franchise fees are amortized over the term of 20 years using the straight-line method. Note 4. Accounts Payable and Accrued Liabilities (in $000s)

			2020			2019
Accounts payablesuppliers			$3,104			$4,564
Salaries and wages payable			141			150
			$3,245			$4,714

Note 5. Long-Term Debt (in $000s)

			2020			2019
Debentures			$12,500			$12,500
Bank term loans, due April 30, 2021, principal repayable at $150,000 a month (2019, at $100,000 a month)			4,200			3,200
			16,700			15,700
Current maturities			(1,800	)		(1,200	)
			$14,900			$14,500

Debentures bear interest at 9% per annum and are due in 2022. Bank term loans bear interest at 8% and the bank advanced $2.2 million during the year. Note 6. Share Capital On September 14, 2019, Larkspur Inc. issued 3.8 million shares with special warrants. Net proceeds from issuing the 3.8 million shares amounted to $14,393,000. Net proceeds from issuing the 3.8 million warrants amounted to $899,000. Assume that Larkspur Inc. follows IFRS and has adopted the policy of classifying interest paid and dividends received as operating activities, and dividends paid as financing activities.

Prepare a statement of cash flows for the year ended April 30, 2020, on a non-comparative basis from the information provided. The CFO wants to use the direct method to report the companys operating cash flows this year. Include all required disclosures. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000). Do not leave any answer field blank. Enter "0" for amounts. Enter amounts in thousands.)

Prepare a reconciliation of the 2020 net loss to cash provided from (used in) operations. This reconciliation is to be included in a note to the financial statements. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000). Do not leave any answer field blank. Enter "0" for amounts. Enter amounts in thousands.)