Question 2 --/10 View Policies Current Attempt in Progress Wildhorse Inc. is a major retailer of road bicycles and a promoter of riding bicycles to work, both to save the environment and improve physical fitness. Financial statements for Wildhorse are presented below. STATEMENT OF FINANCIAL POSITION December 31 Current Assets 2021 2020 Cash 55,950 20,100 Accounts receivable 24,450 10,200 Inventory 31,150 16,150 Prepaid expenses 16,000 11,000 Total current assets 127,550 57,450 Property and Equipment Property and equipment 160,500 150,500 Less: Accumulated depreciation 78,900 70,000 Net property and equipment 81,600 80,500 TOTAL ASSETS $209,150 $137,950 Current Liabilities Accounts payable 11,700 15,600 Salaries payable 11,000 9,000 Interest payable 2,200 3,200 Total current liabilities 24,900 27,800 Loan payable 100,500 60,500 Total Liabilities 125,400 88,300Shareholders' Equity Common shares 9,350 300 Retained earnings 74,400 49,350 Total shareholders' equity 83,750 49,650 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $209,150 $137,950 INCOME STATEMENT For the Years Ended December 31 2021 2020 Sales revenue 605,300 500,000 Cost of sales 411,000 350,000 Gross margin 194,300 150,000 Expenses Salary expense 136,000 125,000 Interest expense 3,500 2,400 Other expenses 6,000 3,000 Depreciation expense 14,900 8,000 Total expenses 160,400 138,400 Operating income 33,900 11,600 Gain on disposal of equipment 1,700 Income tax expense 6,400 1,972 Net income $29,200 $9,628The following is additional information concerning Wildhorse's transactions during the year ended December 31, 2021: . Equipment costing $40,000 was purchased by paying $34,550 cash and issuing 100 shares. . Equipment costing $30,000 that was purchased at the beginning of 2020 was sold at the end of 2021 for $25,700. Straight-line depreciation had been used with an expected asset life of 10 years and a residual value of $0. . The "other expenses" relate to prepaid items. . In order to supplement its cash, Wildhorse borrowed an additional $40,000 and issued an additional 100 shares. . Cash dividends of $4,150 were paid at the end of the fiscal year. . Cost of sales includes $155,000 of direct labour costs. Prepare a statement of cash flows for Wildhorse for the year ended December 31, 2021, using the indirect method. Wildhorse follows ASPE. Include any note disclosure on non-cash financing and investing transactions. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)Prepare a statement of cash flows for Wildhorse for the year ended December 31, 2021, using the indirect method. Wildhorse follows ASPE. Include any note disclosure on non-cash financing and investing transactions. (Show amounts that decrease cash flow with either a - signe g. -15,000 or In parenthesis e.g. (15,000).) Wildhorse Inc. Statement of Cash Flows $ $ Adjustment to reconcile net income to net cash provided by operating activities: Non-cash investing and financing activities $
