Metlock 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. METLOCK INC. Consolidated Statement of Financial Position April 30, 2020, and 2019 (in $000s) Assets 2020 Cash and 60-day treasury bills $3,270 2019 $3.747 23.748 18,410 26,079 21,567 Accounts receivable Inventory Income tax receivable Prepaid expenses 145 0 1,393 1,607 54,635 45.331 Investments (Note 1) 5,961 6,959 Property, plant, and equipment (Note 2) 37,335 45,707 Deferred tax asset 4,875 2,270 Intangible assets-franchises (Note 3) 4,391 1,911 Goodwill 0 12,752 $107.197 $114,930 Liabilities Current Bank overdraft (temporary) $7,023 $ 6,345 Accounts payable and accrued liabilities (Note 4) 3.241 4.710 Current portion of long-term debt 1,800 1,200 12.064 12,255 Long-term debt (Note 5) 14.900 14,500 Shareholders' Equity Share capital (Note 6) 78.257 62.965 Retained earnings 1,976 25,210 80,233 88,175 $107.197 $114.930 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 52.900 39.604 10.415 10,982 Cost of goods sold General and administrative Salaries and wages expense Depreciation and amortization Loss on impairment (goodwill) 26,624 24,500 10.220 11.709 12.752 0 Interest 1,295 1,527 Loss on disposal of capital assets 395 0 114,601 88,322 Loss before equity loss and income tax (23,470) (19.056) Investment income (loss) (Note 1) (2,514 ) 96 Loss before income tax (25,984) (18,960) Income tax benefit 2,750 5,161 Net loss (23,234) (13.799) 25,210 39.009 Retained earnings, beginning of year Retained earnings, end of year 1.976 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 Equity income (loss) $6,959 $6,863 (2,514 ) 96 4,445 6,959 Associate's shares, ending balance at equity Other investments, at amortized cost 1,516 0 $5,961 $6,959 Note 2. Property, Plant, and Equipment Additions to property, plant, and equipment for the current year amounted to $2.291.000. 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 $3,100 $4,560 Salaries and wages payable 141 150 $3,241 $4.710 Note 5. Long-Term Debt (in $000s) 2020 2019 $12.500 $12,500 Debentures 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 termoans bear interest at 8% and the bank advanced $22 I million during the year. Note 6. Share Capital On September 14, 2019, Metlock 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 Metlock 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 company's operating cash flows this year. Include all required disclosures. (Show amounts that decrease cash flow with either a -sign eg. -15,000 or in parenthesis eg. (15,000). Do not leave any answer field blan Enter "o* for amounts. Enter amounts in thousands.) Metlock Inc. Consolidated Statement of Cash Flows C C A ( > IA > A FA A 4 - A A 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 eg.-15,000 or in parenthesis eg. (15,000). Do not leave any answer field blank. Enter "O" for amounts. Enter amounts in thousands.) Metlock Inc. Consolidated Statement of Cash Flows (partial) Adjustments to reconcile net loss to net cash used by operating activities: $ > > $ > A A A