The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows should provide the needed clarity required by directors.

The directors have put forward the following financial information:

Notes
Acquisition of Equipment during 2021		450,000
Sale proceeds from sale of Equipment		210,000
Receipt for issuance of notes payable		50,000
Payment for note payable		100,000
Dividend paid		140,000
Book value of equipment sold		150,000

Requirements

1. Reconstruct the companys comparative balance sheet for 2020/2021 using the information above and compute and show the missing figures to include the appropriate sign as a positive or negative figure.
   2. Prepare a complete statement of cash flows for 2021 using the indirect method using the information above.

Auga Company Ltd Comparative Balance Sheet December 31, 2021 and 2020 Increase/(Decrease 2021 2020) Assets Cash 190,000 30,000 ? Accounts Receivable 220,000 230,000 Supplies 340,000 310,000 ? Prepaid expenses 10,000 30,000 ? Intangible assets 90,000 90,000 ? Equipment, net 900,000 790,000 ? Total Assets 1,750,000 1,480,000 Liabilities Accounts payable 140,000 90,000 ? Accrued liabilities 160,000 190,000 ? Income tax payable 140,000 120,000 ? Long-term notes payable 450,000 500,000 ? Stockholders' Equity Common Stock 310,000 200,000 ? Retained earnings 640,000 400,000 ? Treasury stock (90,000) (20,000) ? Total liabilities and stockholders' equity 1,750,000 1,480,000 1,960,000 Auga Company Ltd Income Statement Year Ended December 31,2021 Revenues and gains: Sales revenue 1,900,000 Gain on sale of Equipment 60,000 Total revenues and gains Expenses Cost of goods sold 850,000 Depreciation expense 190,000 Other operating expense 360,000 Total expenses Income before income taxes Income tax expense Net Income 1,400,000 560,000 180,000 380,000