P17-98 To prepare the cash flow statement, accountants for Craftique Inc. have summarized activity for the year 2020 in two accounts as follows: Cash Beginning balance 64,320 Payments on accounts payable 447,720 Collection of loan 39,600 Payments of dividends 52,640 Sale of investment 31,440 Payments of salaries and wages 172,560 Receipts of interest 39,120 Payments of interest 56,280 Collections from customers 814,440 Purchase of equipment 37,680 Issuance of common shares 33,360 Payments of operating expenses 41,160 Receipts of dividends 25,400 Payment of long-term debt 73,560 Repurchase of common shares 20,280 Payment of income tax 22,680 Ending balance 123,120 101280 30.360 LL 4239 234,480 Repurchase of shares Common Shares 20,250 Beginning balance Issuance for cash Issuance to acquire land Issuance to retire long-term debe Ending balance Craftique Inc.'s income statement and selected balance sheet data follow: Revenues CRAFTIQUE INC. Income Statement For the Year Ended December 31, 2020 Sales revenue Interest revenue Dividend revenue Total revenues $847,560 39.120 25,400 912,080 Expenses and losses Cost of goods sold $420,720 Salaries and wages expense 180,960 29,160 Amortization expense Other operating expenses 52.920 Interest expense 58,560 Income tax expense 19,440 Loss on sale of investments 3,720 Total expenses 765,480 Net income $146,600 B C Dec 31, 2020 Balance Sheet Data Increase/ (Decrease) 2 Current assets Cash and cash equivalents $ ? 31 4 Accounts receivable Inventory 33,120 (14,160) 5 Prepaid expenses 720 6 Long-term Loan receivable (39,600) 7 Long-term investments (35,160) 8 Plant and equipment, net 8.520 9 Land 97,320 10 Current liabilities Accounts payable (41,160) 11 Interest payable 2.280 12 Salaries payable 8,400 13 Other accrued liabilities 12,480 14 Income tax payable 15 Long-term (3.240) Long-term debt 16 Shareholders' equity Common shares (96,360) 17 Retained earnings 133,200 93,960 Required 1. Prepare the cash flow statement of Craftique Inc. for the year ended December 31, 2020, using the direct method to report operating activities. Also prepare a note to the financial statements summarizing the non-cash investing and financ- ing activities. 2. Prepare a schedule showing cash flows from operating activities using the indi- rect method. All activity in the current accounts results from operations.