Statement of Financial Position As at December 31 Income Statement Year ended December 31, 2020 2020 2019 $1,912,000 1,109,000 803,000 521000 282,000 Assets Cash Accounts receivable (net) Inventory Prepaid Insurance Total current assets Property, plant & equipment Accumulated depreciation Total assets $30,000 12,000 $156,000 210,000 185,000 11,500 562,500 1,820,000 (1.060,000) $1,322.500 $135,000 236,000 140,000 9,000 520,000 1,600,000 (960.000) $1.160,000 Revenue Cost of goods sold Gross margin Operating expenses Operating income Non-operating items: Interest expense Loss and of equipment Total non-operating items Income before tax expense Tax expense Net income 42.000 240,000 47.500 $192.500 Additional information 1. Liabilities Accounts payable Other accrued liabilities Income taxes payable Total current liabilities Long-term debt Total liabilities $160,000 72,000 24,000 256,000 600,000 $856,000 $148,000 58,000 20.000 226,000 625,000 $851.000 The equipment sold 2020 had an original cost of 60,000. 2. Depreciation expense of $120,000 is included in operating expenses. 3. The company declared and issued a stock dividend of $35,000 during the year. The only other transactions affecting retained earnings related to net income and cash dividends. Required: 1. Using the indirect method provide a summary of cash flows from each activity and reconcile the cash account. Please show all work. Shareholders' Equity Common shares $170,000 Retained earnings 296,500 Total shareholder equity $466,500 Total liabilities and shareholders' equity $1,322.500 $110,000 199,000 $309,000 $1.160.000 2. Briefly describe the difference between calculating cash from or for operating activities under the direct method as opposed to the indirect method. Determine the cash receipts from customers and the cash paid for inventory under the direct method