Martinezs Custom Clothing ( MCC) sells branded clothing to resorts and corporations. The companys comparative financial statements are presented below.

MARTINEZS CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION December 31
Current Assets		2020		2019
Cash		132,000		80,300
Accounts receivable		32,000		26,000
Inventory		68,000		43,200
Prepaid expenses		9,900		3,000
Total current assets		241,900		152,500
Property and equipment
Property and equipment		102,000		142,000
Less: Accumulated depreciation		53,100		51,700
Net property and equipment		48,900		90,300
TOTAL ASSETS		$ 290,800		$ 242,800
Current liabilities
Accounts payable		24,800		32,900
Salaries payable		8,600		5,300
Interest payable		5,000		7,900
Total current liabilities		38,400		46,100
Loan payable		115,000		107,000
Total liabilities		153,400		153,100
Shareholders' equity
Common shares		19,900		1,500
Retained earnings		117,500		88,200
Total shareholders' equity		137,400		89,700
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$ 290,800		$ 242,800

MARTINEZS CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31
		2020		2019
Sales revenue		873,000		755,000
Cost of sales		649,000		528,000
Gross margin		224,000		227,000
Expenses
Salary expense		99,000		89,000
Interest expense		5,200		1,900
Other expenses		7,800		5,800
Depreciation expense		31,000		32,300
Total expenses		143,000		129,000
Operating income		81,000		98,000
Loss on disposal of equipment		3,400		900
Income tax expense		20,250		17,900
Net income		57,350		79,200

Following is additional information concerning MCCs transactions during the year ended December 31, 2020:

		Equipment costing $ 34,000 was purchased by paying $ 23,000 cash and issuing 400 common shares.
		Equipment costing $ 74,000 that was purchased at the beginning of 2019 was sold at the end of 2020 for $ 41,000. Straight-line depreciation had been used with an expected asset life of 5 years and a residual value of $0.
		The other expenses relate to prepaid items.
		In order to supplement its cash, MCC increased its bank loan by $ 8,000.
		Cash dividends of $ 28,050 were paid at the end of the fiscal year.
		Cost of sales includes $ 166,000 of direct labour costs.

Prepare a statement of cash flows for MCC for the year ended December 31, 2020, using the direct method. CCC follows ASPE. Include any note disclosure on non-cash financing and investing transactions. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Martinezs Custom Clothing Statement of Cash Flows December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020
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