Marin 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 don't understand why you've 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. MARIN INC. Consolidated Statement of Financial Position April 30, 2020, and 2019 (in $000s) Assets 2020 2019 Cash and 60-day treasury bills $3,267 $3,745 Accounts receivable 23,744 18,404 Inventory 26,078 21,568 Income tax receivable 145 0 Prepaid expenses 1,393 1,603 54,627 45,320 Investments (Note 1) 5,976 6,971 Property, plant, and equipment (Note 2) 37,328 45,695 Deferred tax asset 4,874 2,256 Intangible assets-franchises (Note 3) 4,391 1,911 Goodwill 0 12,740 $107,196 $114,893 Liabilities Current Bank overdraft (temporary) $5,886 $ 6.306 Accounts payable and accrued liabilities (Note 4) 3,243 4,712 Current portion of long-term debt 1,800 1,200 10,929 12,218 Long-term debt (Note 5) 14,900 14,500 Shareholders' Equity Share capital (Note 6) 78,257 62,965 Retained earnings 3,110 25,210 81,367 88,175 $107,196 $114,893 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 51,800 38,510 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 1,285 1,515 Loss on disposal of capital assets 399 0 113,483 87,216 Loss before equity loss and income tax (22,352) (17,950) Investment income (loss) (Note 1) (2,511 ) 93 Loss before income tax (24,863) (17,857 ) Income tax benefit 2,763 5,161 Net loss (22,100) (12,696) Retained earnings, beginning of year 25,210 37,906 Retained earnings, end of year 3,110 25,210 Draft Notes to the Financial Statements For the Year Ended April 30, 2020 Note 1. Investments The company's investments at April 30 are as follows (in $000s): 2020 2019 Compuco Ltd. (fair value 2020, $4.3 million) Associate's shares, opening balance at equity $6,971 $6,878 Equity income (loss) (2,511) 93 Associate's shares, ending balance at equity 4,460 6,971 Other investments, at amortized cost 1,516 0 $5,976 $6,971 Note 2. Property, Plant, and Equipment Additions to property, plant, and equipment for the current year amounted to $2,289,000. Proceeds from the disposal of property, plant, and equipment amounted to $250,000. Note 3. Intangible Assets-Franchises 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 payable-suppliers $3,102 $4,562 Salaries and wages payable 141 150 $3,243 $4,712 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, Marin 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 Marin Inc. follows IFRS and has adopted the policy of classifying interest paid and dividends received as operating activities, and dividends paid as financing activities. Part 1 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 company's operating cash flows this year. Include all required disclosures. (Show amounts that decrease cash flow with either a-signeg. -15,000 or in parenthesis eg. (15,000). Do not leave any answer field blank. Enter "O" for amounts. Enter amounts in thousands.) . " Marin Inc. Consolidated Statement of Cash Flows For the Year Ended April 30, 2020 Cash Flows from Operatine Activities Cash Received from Customers Cash Received for Interest $ Pavments for Goods and Services Cash Paid for Other Operating Expenses Payments to and on Behalf of Employees Interest Paid Income Taxes Paid Net Cash Used by Operatine Activities Cash Flows from Investing Activities Proceeds from Sale of Property Plant and Equipment Purchase of Other Investments Purchase of Capital Assets Payments for Franchise Fees Net Cash Used by Investine Activities Cash Flows from Financing Activities Proceeds from Issuance of Shares Repayments of Bank term Loans Proceeds from Bank term Loans Proceeds from Sale of Warrants Net Cash Provided by Financing Activities Net Decrease in Cash Cash and Cash Equivalents, May 1, 2019 Cash and Cash Equivalents. April 30.2020 . $ e Textbook and Media Save for Later Last saved 2 days ago. . 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