Monty Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: MONTY INC. Comparative Statement of Financial Position December 31 2020 2019 $ 45,790 $ 25,180 57,980 51.090 60.120 39,960 5,110 Cash Accounts receivable Inventory Prepaid rent Equipment Accumulated depreciation-equipment Goodwill Total assets 4.050 130,180 163,760 (35,110) ( 25,050) 20,000 56,000 $ 297,490 $ 301,570 Accounts payable $ 46,260 $ 40.180 3,960 6,120 8,180 4.180 7,980 10,090 Income tax payable Salaries and wages payable Short-term loans payable Long-term loans payable Common shares Retained earnings Total liabilities and shareholders' equity 60,000 75,000 130,000 130,000 41,110 36,000 $ 297,490 301.570 $343,885 165,000 178,885 120,000 MONTY INC. Income Statement Year Ending December 31, 2020 Sales revenue Cost of goods sold Gross margin Operating expenses Operating income Interest expense Impairment loss-goodwill Gain on disposal of equipment Income before income tax Income tax expense 58,885 $ 12,200 36.000 (3,100) 45,100 13,785 4,175 Net income $ 9,610 Additional information: 1. w 2. Dividends on common shares in the amount of $4,500 were declared and paid during 2020. Dividends paid are treated as finar Depreciation expense is included in operating expenses, as is salaries and wages expense of $ 69,500. Equipment with a cost of $ 42,000 that was 70% depreciated was sold during 2020. 3. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis eg. (15,000).) Monty Inc. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income /(Loss) $ 9610 Adjustments to reconcile net income/loss to net cash provided by operating activities: Depreciation Expense $ Impairment Loss. Goodwill 36000 Gain on Disposal of Equipment (3100) Increase in Accounts Receivable (20610) Decrease in Inventory 20160 Increase in Prepaid Rent (1060) Increase in Accounts Payable (6080) Decrease in Income Tax Payable 2160 Increase in Salaries and Wages Payable Total Adjustments II Net Cash Provided by Operating Activities Cash Flows from Investing Activities Proceeds on Sale of Equipment 5 DI Purchase of Equipment Net Cash Used by Investing Activities Cash Flows from Financing Activities Principal Payments on Short-Term Loans Principal Payments on Long-Term Loans Dividends paid DOO ! Net Cash Used by Financing Activities Net Increase in Cash III Cash, January 1, 2020 Cash, December 31, 2020 $