Tuit Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: Tuit Inc. Comparative Statement of Financial Position December 31 2020 2019 Cash $53,625 $25,000 Accounts Receivable 58,000 51,000 Inventory 40,000 60,000 Prepaid rent 5,000 4,000 Equipment 154,000 130,000 Accumulated depreciation- equipment (35,000) (25,000) Goodwill 20,000 50,000 Total assets $295,625 $295,000 Accounts payable $46,000 40,000 Income tax payable 4,000 6,000 Salaries and wages payable 8,000 4000 Short-term loans payable 8,000 10,000 Long-term loans payable 60,000 69,000 Common shares 130,000 130,000 Retained earnings 39,625 36,000 Total liabilities and shareholders' equity $295,625 $295,000 Tuit Inc. Income Statement Year Ending December 31, 2020 Sales revenue $338,150 Cost of good sold 165,000 Gross margin 173,150 Operating expenses 120,000 Operating income 53,150 Interest expense $11,400 Impairment loss - goodwill 30,000 Gain on sale of equipment (2,000) 39,400 Income before income tax 13,750 Income tax expense 4,125 Net income $9,625 Additional information: 1. Dividends on common shares in the amount of $6,000 were declared and paid during 2020. 2. Depreciation expense is included in operating expenses, as is salaries and wages expense of $69,000. 3. Equipment with a cost of $20,000 that was 70% depreciated was sold during 2020. "Instructions: a) Prepare a statement of cash flows using the direct method." Tuit Inc. Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2020