Waterway's Custom Clothing (WCC) sells branded clothing to resorts and corporations. The company's comparative financial statements are presented below. WATERWAY'S CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION December 31 Current Assets 2020 2019 Cash 159,000 80,300 Accounts receivable 29,000 24,000 Inventory 73,000 43,300 Prepaid expenses 10,200 2,800 Total current assets 271,200 150,400 Property and equipment Property and equipment 96,000 135,000 Less: Accumulated depreciation 56,100 55,700 39,900 79,300 Net property and equipment TOTAL ASSETS $311,100 $229,700 Current liabilities Accounts payable 23,900 31,800 8,900 5,100 Salaries payable Interest payable 4,800 7,700 Total current liabilities 37,600 44,600 Loan payable 118,000 109,000 Loan payable 118,000 109,000 Total liabilities 155,600 153,600 Shareholders' equity Common shares 20,500 1,400 135,000 74,700 Retained earnings Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 155,500 76,100 $311,100 $229,700 WATERWAY'S CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31 2020 2019 Sales revenue 902,000 766,000 Cost of sales 622,000 576,000 Gross margin 280,000 190,000 Expenses Salary expense 101,000 88,000 Interest expense 5,100 1,900 Other expenses 8,300 5,900 Depreciation expense 30,000 32,300 Total expenses 144,400 128,100 Operating income 135,600 61,900 Depreciation expense 30,000 32,300 Total expenses 144,400 128,100 135,600 61,900 Operating income Loss on disposal of equipment 5,400 900 Income tax expense 33,900 18,600 Net income 96,300 42,400 Following is additional information concerning WCC's transactions during the year ended December 31, 2020: . . Equipment costing $35,000 was purchased by paying $26,000 cash and issuing 400 common shares. Equipment costing $74,000 that was purchased at the beginning of 2019 was sold at the end of 2020 for $39,000. Straight- line depreciation had been used with an expected asset life of 5 years and a residual value of $0. The "other expenses" relate to prepaid items. In order to supplement its cash, WCC increased its bank loan by $9,000. Cash dividends of $36,000 were paid at the end of the fiscal year. Cost of sales includes $173,000 of direct labour costs. . . . Prepare a statement of cash flows for WCC for the year ended December 31, 2020, using the direct method. CCC follows ASPE. Include any note disclosure on non-cash financing and investing transactions. (Show amounts that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000).) Waterway's Custom Clothing Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Cash Received from Customers $ 897000 Cash Paid to Suppliers Proceeds from Sale of Equipment Net Cash Used by Investing Activities Net Cash Provided by Financing Activities Increase in Bank Loan Payable Issuance of Common Shares Payment of Dividends Net Cash Used by Financing Activities Increase in Cash