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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
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 40,080 60,170 Inventory 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 $46,040 $40,010 Accounts payable Income tax payable 4,080 6,170 4,080 6,170 8,150 4,150 Income tax payable Salaries and wages payable Short-term loans payable Long-term loans payable Common shares 7.980 10.170 60,000 75,000 130,000 130,000 Retained earnings 41,625 36,000 Total liabilities and shareholders' equity $297,875 301,500 NOVAK INC. Income Statement Year Ending December 31, 2020 Sales revenue Cost of goods sold Gross margin $344,340 165,000 179,340 Operating expenses 120,000 Operating income 59,340 1. 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. 2. Dividends on common shares in the amount of $4,000 were declared and paid during 2020. Dividends paid are treated as fin 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 indirect method. (Show amounts that decrease cash flow with either a sign e.g. - 15,000 or in parenthesis e.g. (15,000).) Novak Inc. Novak Inc. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2020 e + $ Adjustments to reconcile net income/loss to net cash provided by operating activities: $ a
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