Western Environmental Inc.

Comparative Balance Sheet Information

June $30$

$20232022$

Cash $ $92,560$ $ $51,200$

Accounts receivable $($net$)104,00076,000$

Inventory $80,240116,240$

Prepaid expenses $6,5606,320$

Equipment $164,000152,000$

Accumulated depreciation $35,20020,000$

Accounts payable $32,80040,000$

Wages payable $10,00020,800$

Income taxes payable $2,9604,400$

Notes payable $($long$-$term$)56,00092,000$

Common shares $284,000224,000$

Retained earnings $26,400560$

Western Environmental Inc.

Income Statement

For Year Ended June $30,2023$

Sales $ $794,000$

Cost of goods sold $480,400$

Gross profit $ $313,600$

Operating expenses:

Depreciation expense $ $70,400$

Other expenses $80,480$

Total operating expenses $150,880$

Profit from operations $ $162,720$

Gain on sale of equipment $4,000$

Profit before taxes $ $166,720$

Income taxes $62,720$

Profit $ $104,000$

Required:

Use the Western Environmental Inc. information given below to prepare a statement of cash flows for the year ended June $30,2023,$ using the indirect method. $($List any deduction in cash and cash outflows as negative amounts.$)$

A note is retired at carrying value.

The only changes affecting retained earnings during $2023$ are profit and cash dividends paid.

New equipment is acquired during $2023$ for $$75,200.$

The profit on sale of equipment costing $$63,200$ during $2023$ is $$4,000.$

Prepaid expenses and wages expense affect other expenses on the income statement.

All sales and purchases of merchandise were on credit.