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Question 1 (26 marks) Gold Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2020. Required Prepare a statement of cash flows in good form assuming the Company uses the indirect method. Ensure to report any noncash investing and financing activities Gold Company Balance Sheet December 31, 2020 Cash Accounts receivable Inventory Property, Plant & Equipment (net) Total assets 2020 $ 33,250 15,500 27,500 60,000 $ 136,250 2019 $ 9,000 17,000 31,000 45,000 $ 102,000 Change $ 24,250 (1,500) (3,500) 15,000 $ 34,250 Gold Company Balance Sheet December 31, 2020 Cash Accounts receivable Inventory Property, Plant & Equipment (net) Total assets 2020 $ 33,250 15,500 27,500 60,000 $ 136,250 2019 $ 9,000 17,000 31,000 45,000 $ 102,000 Change $ 24,250 (1,500) (3,500) 15,000 $ 34,250 Accounts payable Accrued liabilities Long-term notes payable Total liabilities 2,000 1,000 42,000 $ 45,000 3,000 750 38,000 $ 41,750 (1,000) 250 4,000 $ 3,250 Common shares Retained earnings Total equity 21,000 70,250 $ 91,250 8,500 51,750 $ 60,250 12,500 18,500 $31,000 Total liabilities and equity $ 136,250 $60,250 $ 34,250 Question 1 (continued) $ 122,500 Gold Company Income Statement For the Year Ended December 31, 2020 Revenues and gains: Sales revenue $ 120,000 Interest revenue 500 Gain on sale of plant assets 2,000 Total revenues Expenses: Cost of goods sold $ 55,000 Salary expense 22,500 Depreciation expense 7,000 Other operating expenses 11,500 Interest expense 500 Income tax expense 2,500 Total expenses Net income 99,000 $ 23,500 Gold Company Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January 1, 2020 $ 51,750 Net income Dividends 23,500 (5,000) $ 70,250 Retained earnings, December 31, 2020 Additional information provided: Equipment costing $27,000 was purchased for cash. Equipment with a net asset value of $5,000 was sold for $7,000 During 2020, the company repaid $16,000 of long-term notes payable. During 2020, the company borrowed $20,000 on a new note payable During 2020, the company sold common shares for $12,500 The company traded common shares for a building valued at $75,000 O O

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