The 2020 income statement and comparative balance sheet of Mandarin Design Ltd follow Mandarin Design Ltd had no non cash financing and investing transactions during 2020 During the year, there were no sales of land or plant and equipment, and no issuances of note payable Required 1 Prepare the operating section of the 2020 cash flow statement, using the indirect method 2 Evaluate net cash flows from operating activities compared to its net income The 2020 income statement and comparative balance sheet of Mandarin Design Ltd follow Mandarin Design Ltd had no non cash financing and investing transactions during 2020 During the year, there were no sales of land or plant and equipment, and no issuances of note payable Required The 2020 income statement and comparative balance sheet of Mandarin Design Ltd follow Mandarin Design Ltd had no non cash financing and investing transactions during 2020 During the year, there were no sales of land or plant and equipment, and no issuances of note payable $257,000 13,600 270,600 MANDARIN DESIGN LTD Income Statement For the Year Ended June 30, 2020 Revenues Sales revenue Interest revenue Total revenues Expenses Cost of goods sold $76,600 Salaries expense 27,800 Amortization expense 4,000 Other operating expenses 10,500 Interest expense 16,600 Income tax expense 27,800 Total expenses Net income 163,300 $107,300 2020 2019 $ 7,200 31,600 1,900 33,600 2,500 66,500 103,000 $246,300 $ 6,300 26,900 700 57,200 1,900 49,400 54,000 $196,400 MANDARIN DESIGN LTD Balance Sheet June 30, 2020 and 2019 Assets Current assets Cash and cash equivalents Accounts receivable Interest receivable Inventory Prepaid expenses Plant and equipment, net Land Total assets Liabilities Current liabilities Accounts payable Interest payable Salaries payable Other accrued liabilities Income tax payable Long term liabilities Note payable Shareholders' equity Common shares Retained earnings Total liabilities and shareholders' equity $ 31,400 4,400 3,100 13,700 8,900 $ 28,800 4,900 6,600 16,000 7,700 75,000 95,000 68,300 41,500 $246,300 34,700 2,700 $196,400

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The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow: Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020.

The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow:

Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020. During the year, there were no sales of land or plant and equipment, and no issuances of note payable.

Required

1. Prepare the operating section of the 2020 cash flow statement, using the indirect method.

2. Evaluate net cash flows from operating activities compared to its net income.

The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow:

Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020. During the year, there were no sales of land or plant and equipment, and no issuances of note payable.

Required

The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow:

Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020. During the year, there were no sales of land or plant and equipment, and no issuances of note payable.

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$257,000 13,600 270,600 MANDARIN DESIGN LTD. Income Statement For the Year Ended June 30, 2020 Revenues Sales revenue Interest revenue Total revenues Expenses Cost of goods sold $76,600 Salaries expense 27,800 Amortization expense 4,000 Other operating expenses 10,500 Interest expense 16,600 Income tax expense 27,800 Total expenses Net income 163,300 $107,300 2020 2019 $ 7,200 31,600 1,900 33,600 2,500 66,500 103,000 $246,300 $ 6,300 26,900 700 57,200 1,900 49,400 54,000 $196,400 MANDARIN DESIGN LTD. Balance Sheet June 30, 2020 and 2019 Assets Current assets Cash and cash equivalents Accounts receivable Interest receivable Inventory Prepaid expenses Plant and equipment, net Land Total assets Liabilities Current liabilities Accounts payable Interest payable Salaries payable Other accrued liabilities Income tax payable Long-term liabilities Note payable Shareholders' equity Common shares Retained earnings Total liabilities and shareholders' equity $ 31,400 4,400 3,100 13,700 8,900 $ 28,800 4,900 6,600 16,000 7,700 75,000 95,000 68,300 41,500 $246,300 34,700 2,700 $196,400