Martinez Inc. is a major retailer of road bicycles and a promoter of riding bicycles to work, both to save the environment and improve physical fitness. Financial statements for Martinez are presented below.

The following is additional information concerning Martinezs transactions during the year ended December 31, 2021:

		Equipment costing $40,000 was purchased by paying $34,500 cash and issuing 100 shares.
		Equipment costing $30,000 that was purchased at the beginning of 2020 was sold at the end of 2021 for $25,900. Straight-line depreciation had been used with an expected asset life of 10 years and a residual value of $0.
		The other expenses relate to prepaid items.
		In order to supplement its cash, Martinez borrowed an additional $40,000 and issued an additional 100 shares.
		Cash dividends of $4,200 were paid at the end of the fiscal year.
		Cost of sales includes $140,000 of direct labour costs.

Prepare a statement of cash flows for Martinez for the year ended December 31, 2021, using the INDIRECT method. Martinez follows ASPE. Include any note disclosure on non-cash financing and investing transactions.

STATEMENT OF FINANCIAL POSITION December 31 Current Assets 2021 2020 Cash 56,550 20,750 Accounts receivable 24,550 10,450 Inventory 30,650 15,650 Prepaid expenses 15,900 10,900 Total current assets 127,650 57,750 Property and Equipment Property and equipment 160,850 150,850 78,900 70,000 Less: Accumulated depreciation Net property and equipment 81,950 80,850 TOTAL ASSETS $209,600 $138,600 Current Liabilities Accounts payable 11,600 15,500 Salaries payable 10,900 8,900 Interest payable 2,450 3,450 Total current liabilities 24,950 27,850 Loan payable 100,850 60,850 Total Liabilities 125,800 88,700 Shareholders' Equity Common shares 9,850 950 Retained earnings 73,950 48,950 Total shareholders' equity 83,800 49,900 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $209,600 $138,600 INCOME STATEMENT For the Years Ended December 31 2021 2020 Sales revenue 613,100 500,000 419,000 350.000 Cost of sales Gross margin 194,100 150,000 Expenses Salary expense 136,000 125.000 Interest expense 3,500 2,400 6,000 3,000 Other expenses Depreciation expense 14,900 8.000 Total expenses 160,400 138,400 Operating income 33,700 11,600 1,900 Gain on disposal of equipment Income tax expense 6,400 1.972 Net income $29,200 $9,628