Sheffield Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020 SHEFFIELD INC Comparative Statement of Financial Position December 31 2020 2019 Cash $51.750 $25,120 Accounts receivable 58,000 51,080 Inventory 40,010 60.040 Prepaid rent 5,260 4,070 Equipment 159.300 130,130 Accumulated depreciation equipment (35,260 125,070 Goodwill 18,000 $2,000 Total assets $297060 $297,370 Accounts payable $46,300 $40,130 Income tax payable 4,010 6,040 Accounts payable $46,300 $40,130 Income tax payable 4,010 6,040 Salaries and wages payable 8,120 4,120 Short-term loans payable 8,000 10,080 Long-term loans payable 58,000 71,000 Common shares 130,000 130,000 Retained earnings 42,630 36,000 Total liabilities and shareholders' equity $297,060 297,370 SHEFFIELD INC. Income Statement Year Ending December 31, 2020 Sales revenue $342,685 Cost of goods sold 165,000 Gross margin 177,685 Operating expenses 120,000 SHEFFIELD INC. Income Statement Year Ending December 31, 2020 Sales revenue $342,685 Cost of goods sold 165,000 Gross margin 177,685 Operating expenses 120,000 Operating income 57,685 Interest expense $12,300 Impairment loss-goodwill 34.000 Gain on disposal of equipment (2,400) 43,900 Income before income tax 13,785 Income tax expense 4,155 Net income $9,630 Additional information: 1. Dividends on common shares in the amount of $3,000 were declared and paid during 2020. Dividends paid are treated as fin 2. Depreciation expense is included in operating expenses, as is salaries and wages expense of $71,000. 3. Equipment with a cost of $42,000 that was 70% depreciated was sold during 2020. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - signes -15,000 or in parenthesis es (15,0001) Sheffield Inc. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income/itos W Adjustments to reconcile net income/loss to net cash provided by operating activities Depreciation Expert 29.50 Sheffield Inc. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2020- Cash Flows from Operating Activities Net Income/(Loss) S 9.630 Adjustments to reconcile net income/loss to net cash provided by operating activities: Depreciation Expense $ 39.590 Impairment Loss, Goodwill 34,000 Gain on Disposal of Equipment 2.400 Increase in Accounts Receivable 6,920 Decrease in Inventory 201030 Increase in Prepaid Rent 1190 Increase in Prepaid Rent 1,190 Increase in Accounts Payable 6,170 Increase in Salaries and Wages Payable 4,000 Decrease in Income Tax Payable 2,030 Total Adjustments 100,880 Net Cash Provided by Operating Activities 100/880 Cash Flows from Investing Activities Proceeds on Sale of Equipment 15.000 Purchase of Equipment 71.170 Net Cash Used by Investing Activities 56,170 Cash Flows from Financing Activities Net Cash Used by Investing Activities 56,170 Cash Flows from Financing Activities Principal Payments on Short-Term Loans 2.080 Principal Payments on tong-Term Loans 13,000 Dividends pald 3.000 Net Cash Used by Financing Activities : 18,080 Net Increase in Cath 26.410 Cash, January 1 2020 120 Cash December 31, 2020 $ 51750
