QUESTION 6 (19 marks) Refer to the financial statements of Quasi Inc. at the end of this exam. Additional information for the year ended December 31, 2019: a. Quasi acquired manufacturing equipment of $40,000 during the year and sold some other equipment for proceeds equal to net book value during the year. b. Quasi received cash of $25,000 from the sale of land. Land is included in Property, plant and equipment. c. Quasi declared and completed a stock dividend. Quasi also declared and paid a cash dividend of $30,000 during 2019. d. Quasi redeemed $32,000 of bonds during 2019. The bonds were originally issued at par. e. During 2019, Quasi renewed the short-term note payable for another year at the same amount. f. No common shares were issued or redeemed during the year. REQUIRED: Prepare a Statement of Cash Flows for the year ended December 31, 2019 in good form using the indirect method. 2019 2018 2017 Assets Cash $ 40,000 $ 15,000 75,000 Prepaid Expenses 71,000 60,000 35,000 Accounts receivable 50,000 30,000 25,000 Inventory 150,000 120,000 110,000 Long-term investment 135,000 135,000 - Property, plant and equipment (net) 177,000 200,000 210,000 Total Assets $ 623,000 $ 560,000 $ 455,000 Liabilities and shareholders' equity Accounts payable $ 100,000 $ 65,000 62,000 Short-term notes payable 40,000 40,000 - Bonds payable 128,000 160,000 160,000 Common shares (400,000 shares outstanding) 157,000 145,000 145,000 Retained earnings 198,000 150,000 88,000 Total liabilities and shareholders' equity $ 623,000 $ 560,000 $ 455,000 Note: 2017 is provided for Question 5 only (not needed for Question 6) 2019 2018 Net sales $ 415,000 $ 335,000 Expenses Cost of goods sold 195,000 175,000 Depreciation expense 34,000 40,000 Operating expenses 50,000 45,000 Total expenses 279,000 260,000 Income from operations 136,000 75,000 Other items Interest expense - 24,000 - 32,000 Gain from sale of land 8,000 - Total - 16,000 - 32,000 Income before income taxes 120,000 43,000 Income tax expense - 30,000 - 20,000 Net income $ 90,000 $ 23,000