Question 4 Statement of Cash Flows (14 marks) The financial statements of Morse Limited appear below: MORSE LIMITED Comparative Statements of Financial Position December 31, 2019 Assets 2019 Cash.. $ 59,000 Accounts receivable. 31,000 Merchandise inventory... 20,000 Property, plant, and equipment. 50,000 Accumulated depreciation. (20.000) Total $140.000 Liabilities and Shareholders' Equity Accounts payable. $ 15,000 Income tax payable. 13,000 Mortgage payable 9,000 Common shares... 39,000 Retained earnings 64.000 Total $140.000 2018 $ 23,000 34,000 15,000 78,000 (24.000) $126.000 $ 23,000 8,000 33,000 24,000 38,000 $126.000 MORSE LIMITED Income Statement Year Ended December 31, 2019 Sales.... $380,000 Cost of goods sold 290,000 Gross profit 90,000 Operating expenses 36,000 Interest expense 4.000 Profit before income tax 50,000 Income tax expense. 10.000 Profit. 40.000 Additional information regarding fiscal 2019: 1. Dividends declared and paid were $14,000. 2. During the year, equipment was sold for $12,000 cash. This equipment cost $28,000 originally and had a carrying amount of $12,000 at the time of sale. 3. Depreciation expense of 12,000 is included in operating expenses. 4. All sales and purchases are on account. 5. Accounts payable pertain to merchandise suppliers. 6. All operating expenses except for depreciation were paid in cash. Instructions: Using the indirect method, prepare a statement of cash flows for December 31, 2019