The comparative unclassified statement of financial position for Sheridan Ltd. follows: SHERIDANLTD. Statement of Financial Position December 31 Assets 2021 Cash $55,000 Accounts receivable 90,000 Inventory 178,000 Estimated inventory returns 6,000 Long-term investments 79,000 Equipment 270,000 Accumulated depreciation (79,000) Total assets $599,000 2020 $25,000 78,500 185,000 3,000 100.000 174,000 (30.000) $535,500 Liabilities and Shareholders' Equity Accounts payable Refund liability Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders' equity $22,000 10,000 165,000 201,000 201,000 $599,000 $ 45,000 3,000 171,500 180,000 136,000 $535,500 1. 2. 3. Additional information pertaining to 2021: Net income was $80,000 Sales were $972,000. Cost of goods sold was $756,000. Operating expenses were $49,000, exclusive of depreciation expense. Depreciation expense was $49,000. Interest expense was $14,000. Income tax expense was $30,000. Long-term investments were sold at a gain of $6,000. No equipment was sold during the year. $6,500 of the bank loan was repaid during the year. Common shares were issued for $21,000. 5. 6. 7. 8. 9. 10. 11. SHERIDAN LTD. Statement of Cash Flows-Indirect Method Year Ended December 31, 2021 Cash flows from operating actvitles Adjustments to reconcile net income to Net cash provided by operating activities Cash flows from Investing activities Proceeds from sale of long-term Investments Purchase of equipment Net cash used by Investing activitles $ Cash flows from financing activities Issue of common shares Repayment of bank loan Payment of cash dividends Net cash used by financing activitles Net Increase in cash Cash, January 1 IM Cash, December 31