Question 1: Preparing the statement of cash flows (indirect method) Required ** exercise 16-7&& in the textbook 1: Use the Western Environmental Inc information given below to prepare a statement of cash flows for the year ended June 30, 2020; using the indirect method a. A note is retired at carrying value b. The only changes affecting retained earning during 2020 are profit and cash dividends paid c New equipment is acquired during 202 for $73,980. d. The profit on sale of equipment costing $ 61,980 during 2020 is 3,600 e. Prepaid expenses and wages expense affect other expenses on the income statement. f. All sales and purchases of merchandise were on credit Western Environmental Inc Comparative Balance Sheet Information 2020 2019 $ 92.160 $ 47,000 Cash. 102.000 75.600 Accounts receivable (net...... Inventory 0.220 Western Esiromental Inc. Income Statement For Year Ended June 30, 2020 Sales $792.000 Cost of goods sold. 480.000 Gross profit. $312.000 Operating expenses Depreciation expense $70.380 Other expenses... 80.460 Total operating expenses.... 150,840 Profit from operations. $161.160 Gain on sale of equipment... 3.600 Profit before taxes. $164.760 Income taxes 61,160 Profit $100,600 116.220 6.100 162.000 Prepaid expenses Equipment.... Accumulated depreciation... Accounts payable......... Wages payable Income taxes payable. Notes payable long term.... Common shares............ Retained earnings........ 32.400 9.600 150,000 18.000 39.600 20,400 4.380 2.940 54.000 90,000 282.000 222.000 27.180 740 II: Calculating cash flows form operating actives using the direct method Refer to the information about Western Environmental Inc. presented above. Use the direct method and prepare statement of cash flows. Question 1: Preparing the statement of cash flows indirect method) Required ** exercise 16-788 in the textbook 1: Use the Western Environmental Inc information given below to prepare a statement of cash flows for the year ended June 30, 2020; using the indirect method a. A note is retired at carrying value b. The only changes affecting retained earning during 2020 are profit and cash dividends paid c. New equipment is acquired during 202 for $73,980. d. The profit on sale of equipment costing $ 61,980 during 2020 is 3,600 e. Prepaid expenses and wages expense affect other expenses on the income statement. f. All sales and purchases of merchandise were on credit. Western Environmental Inc. Comparative Balance Sheet Information June 30 2020 2019 Cash. $ 92,160 $ 47,000 Accounts receivable (net)..... 102,000 75,600 Inventory. 80.220 Western Environmental Inc. Income Statement For Year Ended June 30, 2020 Sales.... $792.000 Cost of goods sold. 480.000 Gross profit $312.000 Operating expenses Depreciation expense... 70.380 Other expenses... 80.460 Total operating expenses... 150.840 Profit from operations. S161,160 Gain on sale of equipment...... 3.600 Profit before taxes $164.760 Income taxes. 61.160 Profit $103.600 116,220 6,300 Prepaid expenses... 6,540 162,000 150,000 34.800 18,000 32.400 39.600 20,400 9,600 Equipment.. Accumulated depreciation.... Accounts payable Wages payable Income taxes payable... Notes payable (long-term)..... Common shares....... Retained earning......... 2.940 4,380 54,000 90,000 282,000 222.000 27.180 740 II: Calculating cash flows form operating actives using the direct method Refer to the information about Western Environmental Inc. presented above. Use the direct method and prepare statement of cash flows.