Mamma Ltd. had the following comparative statement of financial position:

Mamma Ltd.

Comparative Statement of Financial Position

As at December 31

2020 2019

Cash $20,500 $12,500

Accounts receivable 34,000 25,500

Inventories 20,000 30,000

Prepaid insurance 2,500 2,000

Equipment 102,000 90,000

Accumulated depreciationequipment (22,500) (12,500)

Total assets $156,500 $147,500

Accounts payable $23,000 $20,000

Wages payable 4,000 2,000

Interest payable 2,000 3,000

Income taxes payable 4,000 5,000

Long-term debt 30,000 34,500

Bonds payable 0 350

Common shares 65,000 64,650

Retained earnings 28,500 18,000

Total liabilities and shareholders equity$156,500 $147,500

Additional information:

1. Net income for the fiscal year was $13,500.

2. Equipment that costing $10,000 was sold for a gain of $1,000 during 2020. The equipments accumulated depreciation was $7,000.

3. New debt amounting to 1,000 was incurred during the year.

4. Conversion of bonds payable to common shares for $350.

Required:

A. Prepare a statement of cash flows in good form using the indirect method.

B. Discuss briefly your results.