Sheffield Inc., a major retailer of high-end office furniture, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows. The comparative statement of financial position and income statement for Sheffield as at May 31, 2020, are as follows:

Sheffield Inc.

Statement of Financial Position

May 31, 2020, and May 31, 2019

20202019AssetsCash$61,400$21,700Accounts receivable

77,50055,400Inventory192,000197,500Prepaid insurance

8,6007,100Total current assets

339,500281,700Plant assets

582,000511,500Less: Accumulated depreciation

145,200120,000Net plant assets

436,800391,500Total assets

$776,300$673,200Liabilities and Shareholders' EquityAccounts payable

$122,900$114,800Salaries and wages payable

10,70013,000Interest payable

4,5002,800Total current liabilities

138,100130,600Mortgage payable

77,000115,000Total liabilities

215,100245,600Shareholders' equity

Common shares

405,000362,000Retained earnings

156,20065,600Total shareholders' equity

561,200427,600Total liabilities and shareholders' equity$776,300$673,200

Sheffield Inc.

Income Statement

For the Year Ended May 31, 2020

Sales

$985,000

Cost of goods sold

419,000Gross margin

566,000Expenses

Salaries and wages expense

207,300Other operating expenses

120,400Depreciation expense

25,200Total operating expenses

352,900Operating income

213,100Interest expense

26,000Income before income tax

187,100Income tax expense

56,500Net earnings

$ 130,600

The following is additional information about transactions during the year ended May 31, 2020 for Sheffield Inc., which follows IFRS.

1.Plant assets costing $70,500 were purchased by paying $48,000 in cash and issuing 5,000 common shares.

2.In order to supplement its cash, Sheffield issued 4,000 additional common shares.

3.Cash dividends of $40,000 were declared and paid at the end of the fiscal year. Dividends paid are treated as financing activities.

Prepare a statement of cash flows for Sheffield Inc. for the year ended May 31, 2020 using the direct method.