Question 2 View Policies Current Attempt in Progress Flint 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 Flint are presented below. STATEMENT OF FINANCIAL POSITION December 31 Current Assets 2021 Cash 56.650 Accounts receivable 25.300 Inventory 31,600 Prepaid expenses 15.100 Total current assets 128.650 Property and Equipment Property and equipment 160,200 Less: Accumulated depreciation 78.900 Net property and equipment 81,300 TOTAL ASSETS $209,950 2020 20,900 11.000 16,600 10.100 58,600 150.200 70.000 80,200 $138.800 Current Liabilities Accounts payable 11,900 Salaries payable 10,100 Interest payable 3.000 Total current liabilities 25,000 Loan payable 100.200 Total Liabilities 125,200 Shareholders' Equity Common shares 10.200 Retained earnings 74.550 Total shareholders' equity 84.750 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $209,950 15,800 8,100 4.000 27,900 60,200 88,100 1,100 49,600 50,700 $138,800 INCOME STATEMENT For the Years Ended December 31 2021 2020 Sales revenue 611.300 500,000 Cost of sales 417,000 350.000 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 $9,628 The following is additional information concerning Flint's transactions during the year ended December 31, 2021: Equipment costing $40,000 was purchased by paying $35,050 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, Flint borrowed an additional $40,000 and issued an additional 100 shares. Cash dividends of $4,250 were paid at the end of the fiscal year. Cost of sales includes $200,000 of direct labour costs. Prepare a statement of cash flows for Flint for the year ended December 31, 2021, using the indirect method. Flint 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.) Flint Inc. Statement of Cash Flows Adjustment to reconcile net income to net cash provided by operating activities: Non-cash investing and financing activities
