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The following information was drawn from the financial records of CheeseFactory Inc., as at the company's fiscal year-end. a) CheeseFactory Inc Balance Sheet As at

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The following information was drawn from the financial records of CheeseFactory Inc., as at the company's fiscal year-end. a) CheeseFactory Inc Balance Sheet As at December 31 2020 2019 Assets Cash 325,000 428,000 Accounts receivable 465,000 318,000 Inventory 675,000 800,000 Prepaid operating expenses 119,000 130,000 Long term Investments 350,000 500,000 Equipment 1,850,000 1,785,000 Less: Accumulated depreciation(525,000) (410,000) 3,259,000 3,551,000 Liabilities and Shareholders' Equity Accounts payable 322,000 272,000 Current income tax payable 116,000 167,000 Future income tax liability 15,000 12,000 Bonds payable 718,000 1,200,000 Common shares 625,000 600,000 Retained earnings 1,463,000 1,300,000 3,259,000 3,551,000 CheeseFactory Inc Income Statement For the year ended December 31, 2020 Sales 1,940,200 Cost of goods sold 1,259,000 Gross profi 681,200 Operating expenses 421,600 Income from operations 259,600 Interest expense 7,200 Gain on sale of equipment 12,500 Income before income tax 264,900 Income tax expense: Current 62,800 Future 3,000 Net income 199,100 ADDITIONAL INFORMATION: Depreciation expense is included in "operating expenses." Accounts payable is related to the purchase of inventory. During the year, a piece of equipment that originally cost $125,000 was sold for cash. The equipment was 30%% depreciated at the time of the sale. (Hint: Depreciation & Gain on Sale New equipment was purchased this year. Long-term investments were sold for cash during the year. Hint: Future income tax expense should be considered for the indirect method Hint: Look at all tax accounts for the direct method REQUIRED: Prepare, in good form, a statement of cash flows for CheeseFactory Inc. using the direct method. (17 Marks) Prepare, in good form, only the Operating Activities section of a statement of cash flows for Leonard Inc. using the indirect method. (4 Marks) Hint: Prepare which ever form you are comfortable with first and then try the other method

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