Question 26 Monty Inc., a retailer of garden tools that follows ASPE, had the following statements prepared as of December 31, 2020: MONTY Inc. Comparative Statement of Financial Position December 31 2020 2019 Cash $60,750 $53,600 Accounts receivable 58,000 50,200 Inventory 40,500 72,500 Prepaid rent 5,700 4,000 Equipment 151,000 132,500 Accumulated depreciation equipment (32,750) (22,900) Total assets $283,200 $289,900 Accounts payable $46,500 $37,000 Income tax payable 3,500 6,700 Long-term loans payable 61,500 70,000 Common shares 130,250 130,250 Retained earnings 41,450 45,950 Total liabilities and shareholders' equity $283,200 $289,900 MONTY Inc. Income Statement Year Ending December 31, 2020 Sales revenue $368,000 Cost of goods sold 210,000 Gross margin 158,000 Operating expenses 121,500 Operating income 36,500 Interest expense $11,200 Gain on disposal of equipment (2,200) 9,000 Income before income tax 27,500 Income tax expense 20,200 Net income $7,300 Additional information: 1. Dividends on common shares in the amount of $11,800 were declared and paid during 2020. 2. Depreciation expense of $24,200 is included in operating expenses. 3. Equipment with a cost of $20,500 that was 70% depreciated was sold during 2020. Prepare a statement of cash flows using the direct method. (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 using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) MONTY Inc. Statement of Cash Flows (Direct Method) UUUUUUUUUL Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000).) MONTY CORPORATION Statement of Cash Flows (Indirect Method) Adjustments to reconcile net income to net cash provided by operating activities