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Question 5 View Policies Current Attempt in Progress Riverbed's Custom Clothing (RCC) sells branded clothing to resorts and corporations. The company's comparative financial statements are presented below. RIVERBED'S CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION December 31 Current Assets 2020 2019 Cash 150,000 78.500 Accounts receivable 29,000 25.000 Inventory 70.000 44.800 Prepaid expenses 10.400 2.900 Total current assets 259,400 151.200 Property and equipment Property and equipment 99.000 143.000 Less: Accumulated depreciation 54,800 56,000 Net property and equipment 44,200 87.000 TOTAL ASSETS $303,600 $238,200 Current liabilities Accounts payable 25,700 30,400 Salaries payable 9.400 5,000 Interest payable 4.800 8.400 Total current liabilities 39,900 43,800 Loan payable 113.000 105,000 Total liabilities 152.900 148.800 Shareholders' equity Common shares 21.000 1.600 Retained earnings 129,700 87,800 Total shareholders' equity 150.700 89.400 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $303,600 $238,200 RIVERBED'S CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31 2020 2019 Sales revenue 905.000 727,000 Cost of sales 667,000 542.000 Gross margin 238.000 185.000 Expenses Salary expense 100.000 86,000 Interest expense 5.200 1.900 Other expenses 8.000 6,300 Depreciation expense 30.000 32.200 Total expenses 143,200 126.400 Operating income 94,800 58.600 Loss on disposal of equipment 7.800 900 Income tax expense 23.700 18.300 Net income 63.300 39.400 Following is additional information concerning RCC's transactions during the year ended December 31, 2020: Equipment costing $34,000 was purchased by paying $24,000 cash and issuing 400 common shares. Equipment costing $78.000 that was purchased at the beginning of 2019 was sold at the end of 2020 for $39.000. Straight-line depreciation had been used with an expected asset life of 5 years and a residual value of $0. The "other expenses relate to prepaid items. In order to supplement its cash, RCC increased its bank loan by $8,000. Cash dividends of $21,400 were paid at the end of the fiscal year. Cost of sales includes $183.000 of direct labour costs. Riverbed's Custom Clothing Statement of Cash Flows Non-cash investing and financing activities