WASHINGTON COMPANY Comparative Balance Sheet as of March 31, 2020 Mar 1, 2020 Mar 31, 2020 Current assets Cash and cash equivalents--- $ 9,100 $ 4,000 Accounts receivable 19,400 21.700 Inventories- 63,200 60,600 Prepaid expenses 1,900 1,700 Current liabilities Notes payable (for inventory purchases)----- $ 4,000 $ 4,000 Accounts payable 30,300 27,600 10,700 Accrued liabilities 11,100 8,000 Income tax payable 4,700 Washington's transactions during the year ended March 31, 2017 included the following: Payment of cash dividend - $ 30,000 Cash acquisition of equipment 78.700 Issue of long-term 5-year loan to borrow cash 50,000 Acquisition of land by issuing 5-year notes payable ---- 62,000 Amortization expense 2,000 Cash acquisition of building 47.000 Net income 70,000 Issue of ordinary shares for cash 11,000 Share dividend 18,000 Sale of long-term investment 13,700 Depreciation expense 9,000 (All current account balances resulted from operating transactions) Required a) Prepare the full statement of cash flows for the year ended March 31, 2020, using the INDIRECT method. (19 marks) b) In five sentences or less, explain "liquidity and "solvency" in the analysis of a firm's financial position