Novak Inc, a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: NOVAK INC. Comparative Statement of Financial Position December 31 2020 2019 Cash $49.775 $25,150 Accounts receivable 57.980 51,170 Inventory 40.080 60,170 Prepaid rent 5.120 4.110 Equipment 160,040 130,010 Accumulated depreciation equipment (35.120) (25.110) Goodwill 20,000 56,000 Total assets $297,875 $301.500 Accounts payable $46,040 $40,010 Income tax payable 4,080 6,170 4,080 6,170 Income tax payable Salaries and wages payable 8,150 4,150 Short-term loans payable 7,980 10.170 Long-term loans payable 60.000 75,000 Common shares 130,000 130,000 Retained earnings 41,625 36.000 Total liabilities and shareholders' equity $297,875 301.500 NOVAK INC. Income Statement Year Ending December 31, 2020 $344.340 Sales revenue Cost of goods sold Gross margin 165,000 179,340 Operating expenses 120,000 Operating income 59,340 Interest expense $11.900 Impairment loss-goodwill 36,000 Gain on disposal of equipment (2.300) 45.600 Income before income tax 13,740 Income tax expense 4,115 Net income $9.625 Additional information: 1. treated as fin 2. Dividends on common shares in the amount of $4,000 were declared and paid during 2020. Dividends paid Depreciation expense is included in operating expenses, as is salaries and wages expense of $73,500. Equipment with a cost of $42.000 that was 70% depreciated was sold during 2020 3. Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a sign .g. - 10,000 or in parenthesis e-. (10.000).) Novak Inc. Statement of Cash Flows (Direct Method) Novak Inc. Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2020 Net Cash Provided by Investing Activities Cash Flows from Financing Activities Net Decrease in Cash Net Cash Provided by Financing Activities Net Cash Used by Operating Activities Cash, January 1, 2020 Net Cash Used by Financing Activities Cash Flows from Operating Activities Net Cash Used by Investing Activities Cash Flows from Investing Activities Cash, December 31, 2020 Net Increase in Cash Net Cash Provided by Operating Activities a Novak Inc. Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2020 0 $ 5