Sheridan Inc. is a major retailer of road bicycles and a promoter of riding bicycles to work, both to save the environment and improve physical fitness. Financial statements for Sheridan are presented below. Current Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets STATEMENT OF FINANCIAL POSITION December 31 2021 2020 56,050 20.700 24.500 10,250 31,450 16,450 15,600 10,600 127,600 58,000 Property and Equipment Property and equipment 160,900 150,900 Less: Accumulated depreciation 78,900 70,000 Net property and equipment 82,000 80,900 TOTAL ASSETS $209,600 $138,900 Current Liabilities Accounts payable 11,650 15,550 Salaries payable 10,600 8.600 Interest payable 2,250 3,250 Total current liabilities 24.500 27,400 Loan payable 100,900 60,900 Total Liabilities 125,400 88,300 Shareholders' Equity Common shares 9,950 900 Retained earnings 74,250 49,700 Total shareholders' equity 84,200 50,600 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $209,600 $138,900 INCOME STATEMENT For the Years Ended December 31 INCOME STATEMENT For the Years Ended December 31 2021 2020 Sales revenue 601,400 500,000 Cost of sales 407,000 350,000 Gross margin 194,400 150,000 Expenses Salary expense 136,000 125,000 Interest expense 3,500 2,400 Other expenses 6,000 3,000 Depreciation expense 14,900 8,000 Total expenses 160,400 138,400 Operating income 34,000 11,600 Gain on disposal of equipment 1,600 Income tax expense 6,400 1,972 Net income $29,200 $9,628 The following is additional information concerning Sheridan's transactions during the year ended December 31, 2021: Equipment costing $40,000 was purchased by paying $34,750 cash and issuing 100 shares. Equipment costing $30,000 that was purchased at the beginning of 2020 was sold at the end of 2021 for $25,600. Straight- line depreciation had been used with an expected asset life of 10 years and a residual value of $0. The "other expenses" relate to prepaid items. In order to supplement its cash, Sheridan borrowed an additional $40,000. Cash dividends of $4,650 were paid at the end of the fiscal year. Cost of sales includes $125,000 of direct labour costs. Prepare a statement of cash flows for Sheridan for the year ended December 31, 2021, using the direct method. Sheridan follows ASPE. Include any note disclosure on non-cash financing and investing transactions. (Show amounts that decrease cash flow with either a- signe.g. -15,000 or in parenthesis e.g. (15,000).) Sheridan, Inc. Statement of Cash Flows OneDrive Sc Th On