The condensed financial statements of Stauttner, Inc. appear below: 2019 STAUTTNER, INC. Statement of Financial Position December 31 Assets 2020 Cash $83,260 Accounts receivable 76,700 Inventories 141,670 Prepaid expenses 7,670 Property, plant, and equipment 289,100 Accumulated depreciation (87,910) Intangible assets 63,930 $574,420 Liabilities and Shareholders' Equity Accounts payable $55,220 Wages payable 20,060 Income taxes payable 1,480 Bonds payable 112,100 Common shares 206,500 Retained earnings 179,060 $574,420 $48,440 73,160 145,970 7,320 283,200 (84,960) 54,280 $527,410 $48,380 18,290 2,070 129,800 206,500 122,370 $527,410 $646,580 407,100 239,480 STAUTTNER, INC. Statement of Income Year Ended December 31, 2020 Sales Cost of goods sold Gross profit Operating expenses $45,430 Depreciation expense 54,870 Loss on sale of equipment 8,440 Profit from operations Less: Interest expense Profit before income tax Income tax expense Net income 108,740 130,740 3,220 127,520 38,256 $89,264 Additional information: 1. 2. 3. 4. 5. New equipment costing $83,780 was purchased for cash during the year. The increase in intangible assets is related to legal fees incurred to trademark new packaging designs. Accounts payable relate only to merchandise creditors. Operating expenses included wages expense of $37,760. Interest expense was paid in cash during the year. TNER, Statement of Cash Flows (Direct Method) Year Ended December 31, 2020 Cash Flows from Operating Activities $