Question 1 Digiread Technologies Ltd. (DTL) is a privately held distributor of e-readers and tablets. The Calgary-based company is well established and is currently managed by its founder, Erin Jacobs. The company's financial statements are presented below, together with some additional information. DIGIREAD TECHNOLOGIES LTD Statement of Income For the Year Ended December 31, 2020 $46,460,000 31,648,000 14,812,000 3,680,000 1,104,000 1,748,000 1,472,000 Gain on sale of equipment (552,000) $7,360,000 Sales revenue Cost of goods sold Gross profit Wages expense Depreciation expense Interest expense Income tax expense Net income DIGIREAD TECHNOLOGIES LTD. Statement of Financial Position As at December 31 2020 2019 Assets Current assets: Cash $14,260,000 $7,820,000 10,580,000 14,260,000 15,548,000 17,480,000 40,388,000 39,560,000 36,248,000 27,600,000 (6,072,000) (5,888,000) $70,564,000 $61,272,000 Accounts receivable (net) Total current assets Equipment Accumulated depreciation, equipment Total Assets Liabilities and shareholders' equity Accumulated depreciation, equipment Total Assets Liabilities and shareholders' equity Current liabilities: (6,072,000) (5,888,000) $70,564,000 $61,272,000 $10,948,000 $6,440,000 920,000 12,052,000 7,360,000 19,320,000 23,920,000 12,880,000 8,280,000 26,312,000 21,712,000 Total liabilities and shareholders' equity $70,564,000 $61,272,000 Accounts payable 1,104,000 Wages payable Total current liabilities Bonds payable Common shares Retained earnings DIGIREAD TECHNOLOGIES LTD Other Selected Financial Information for the Year Ended December 31, 2020 1. Total sales in 2020 were consistent with the prior year's, and the company's dividend policy has remained consistent for the past five years. 2. Dring 2020, DTL sold a piece of equipment for $1,932,000. The equipment had originally cost $2,300,000 and had a net carrying amount of $1,380,000 at the time of sale 3. On August 1, 2020, DTL's board of directors approved the retirement of bonds with a carrying amount $4,600,000 through the issuance of common shares. (a1) DTL's management shareholders have asked you to prepare the statement of cash flows for DTL using indirect method for determining cash flows from operating activities. (Show amounts that decrease cash flow with either a sign e.g. -15,000 or in parenthesis e.g. (15,000).) DIGIREAD TECHNOLOGIES LTD. statement of Cash Flows, Indirect Method For the Year Ended December 31, 2020 Supplemental Cash Flow information Cash paid for interest Cash paid for income tax Supplemental Cash Flow information Cash paid for interest Cash paid for income tax Non-cash investing and finan cing activities: During the year, the company's board of directors approved the retirement of bonds with a carrying amount of$ through the issuance of common shares. LINK TO TEXT LINK TO TEXT