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 Cash Accounts receivable Merchandise inventory Property, plant, and equipment Accumulated depreciation Total 2019 $ 59,000 31,000 20,000 50,000 (20.000 $140.000 2018 $ 23,000 34,000 15,000 78,000 (24.000) $126.000 Liabilities and Shareholders' Equity Accounts payable Income tax payable Mortgage payable Common shares Retained earnings Total $ 15,000 13,000 9,000 39,000 64.000 $140,000 $ 23,000 8,000 33,000 24,000 38.000 $126.000 MORSE LIMITED Income Statement Year Ended December 31, 2019 Sales Cost of goods sold Gross pri Operating expenses Interest expense Profit before income tax Income tax expense Profit. $380,000 290.000 90,000 36.000 4.000 50,000 10.000 $ 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