The comparative statement of financial position of Flounder Inc. as at June 30, 2017, and a statement of comprehensive income for the 2017 fiscal year follow: FLOUNDER INC. Statement of Financial Position June 30, 2017 June 30 Assets 2017 2016 Cash $ 17,600 $ 33,440 Accounts receivable 75,680 65,120 Inventory 90,640 89,760 Prepaid expenses 1,760 5,280 Fair Value-OCI Investments 41,360 39,600 Equipment 152,240 139,920 Accumulated depreciation (30,800) (22,000) Total $348,480 $351,120 Liabilities and Shareholders' Equity Accounts payable $ 101,200 $ 88,000 Income taxes payable 1,760 2,640 Dividends payable 4,400 0 Long-term notes payable 73,920 104,720 Common shares 27,280 21,120 Retained earnings 130,240 126,720 Accumulated other comprehensive income 9,680 7,920 Total $348,480 $351,120 FLOUNDER INC. Statement of Comprehensive Income For the Year Ended June 30, 2017 Net sales $284,240 Cost of goods sold 154,000 Gross profit 130,240 Operating expenses 105,600 Income from operations 24,640 Interest expense 7,920 Income before income taxes 16,720 Income taxes 5,280 Net income 11,440 Other comprehensive income Unrealized gain on FV-OCI investments 1,760 Comprehensive income $ 13,200 Additional information: 1. 2. 3. Flounder follows IFRS. Assume that interest is treated as an operating activity for purposes of the statement of cash flows. Operating expenses include $8,800 in depreciation expense. There were no disposals of equipment during the year. Common shares were issued for cash. During the year, Flounder acquired $7,040 of equipment in exchange for long-term notes payable. 4. 5. (a) Prepare the statement of cash flows for Flounder for the year ended June 30, 2017, using the indirect method along with any necessary note disclosure. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) FLOUNDER INC. Statement of Cash Flows $ Adjustments to reconcile net income to net cash provided by operating activities: $ >