The condensed financial statements of Stauttner, Inc. appear below: STAUTTNER, INC. Statement of Financial Position December 31 Assets 2020 2019 Cash $69.148 $40,230 Accounts receivable 63,700 60,760 Inventories 117.660 121.230 6,370 6,080 Prepaid expenses Property, plant, and equipment Accumulated depreciation 240,100 235,200 (73,010) (70,560) Intangible assets 53,100 45,080 $477,068 $438,020 Liabilities and Shareholders' Equity Accounts payable Wages payable $45,860 $40,180 16,660 15,190 Income taxes payable 1.230 1,720 ALA ALLA Liabilities and Shareholders' Equity Accounts payable $45,860 $40,180 Wages payable 16,660 15,190 1,230 1,720 Income taxes payable Bonds payable Common shares 93,100 107,800 171,500 171,500 Retained earnings 148,718 101,630 $477,068 $438,020 STAUTTNER, INC. Statement of Income Year Ended December 31, 2020 $536,990 Sales 338,100 198,890 Cost of goods sold Gross profit Operating expenses Depreciation expense Loss on sale of equipment $37,730 45,570 7,010 90,310 ARA Sales $536,990 Cost of goods sold 338,100 198,890 $37,730 45,570 7,010 90,310 Gross profit Operating expenses Depreciation expense Loss on sale of equipment Profit from operations Less: Interest expense Profit before income tax Income tax expense 108,580 2,680 105.900 31,770 Net income $74,130 Additional information: 1 2. New equipment costing $69,580 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 3. 4 Operating expenses included wages expense of $31,360. 5. Interest expense was paid in cash during the year 2. 3 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 $31,360. Interest expense was paid in cash during the year. 4 5. (a) Prepare a statement of cash flows for Stauttner Inc. using the direct method. Assume Stauttner follows IFRS and has chosen to classify Interest paid and collected as operating activities and dividends received as operating activities while dividends paid are financing activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis es (15,000).) STAUTTNER, INC. Statement of Cash Flows (Direct Method) Year Ended December 31, 2020 STAUTTNER, INC. Statement of Cash Flows (Direct Method) Year Ended December 31, 2020