Western Environmental Inc. Comparative Balance Sheet Information June 30 2020 2019 Cash $ 92,760 $ 55,200 Accounts receivable (net) 105,000 76,200 Inventory 80,250 116,250 Prepaid expenses 6,570 6,330 Equipment 165,000 153,000 Accumulated depreciation 35,400 21,000 Accounts payable 33,000 40,200 Wages payable 10,200 21,000 Income taxes payable 2,970 4,410 Notes payable (long-term) 57,000 93,000 Common shares 285,000 225,000 Retained earnings 26,010 2,370 $ 795,000 480, 600 $314,400 Western Environmental Inc. Income Statement For Year Ended June 30, 2020 Sales Cost of goods sold Gross profit Operating expenses: Depreciation expense $ 70,410 Other expenses 80,490 Total operating expenses Profit from operations Gain on sale of equipment Profit before taxes Income taxes Profit 150,900 $ 163,500 4,200 $167,700 63,500 $104,200 Required: Use the Western Environmental Inc. information given below to prepare a statement of cash flows for the year ended June 30, 2020, using the indirect method. (List any deduction in cash and cash outflows as negative amounts.) a. A note is retired at carrying value. b. The only changes affecting retained earnings during 2020 are profit and cash dividends paid. c. New equipment is acquired during 2020 for $75,810 d. The profit on sale of equipment costing $63,810 during 2020 is $4,200. e. Prepaid expenses and wages expense affect other expenses on the income statement. f. All sales and purchases of merchandise were on credit. WESTERN ENVIRONMENTAL INC. Statement of Cash Flows For Year Ended June 30, 2020 Cash flows from operating activities Adjustments to reconcile profit to net cash provided by operating activities +