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Question 4 (15 marks) Tomato Company Limited, a merchandiser, recently completed its calendar-year 2019 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses paid in advance are initially debited to Prepaid Expenses. The company's statements of financial position and income statement follow. Tomato Company Limited Income statement For year ended December 31, 2019 Sales 682,298 Cost of goods sold Gross profit Operating expenses Depreciation expense 461.965 220,333 14,923 Interest expense 6,767 4,478 Insurance expense Salaries expenses Other expenses Other gains (losses) Loss on sale of equipment 67,123 37,066 130,357 3,704 Profit before tax 86,272 Income tax expense 11,190 Net profit 75,082 Tomato Company Limited Comparative Statements of Financial Position December 31, 2019 and 2018 2019 2018 Assets Current assets Cash 143,776 34,602 Accounts receivable 53,100 43,130 Merchandise inventory Prepaid expenses 33,647 25,114 4,197 2,328 115,144 224,750 Noncurrent assets Equipment Accum. Depreciation-Equipment 241,905 223,107 (55,752) (66,954) 186,153 156,153 Total assets 410,903 271,297 Liabilities and Equity Liabilities Current liabilities Accounts payable Short-term notes payable 84,281 76,757 65,000 23,000 149,281 99,757 Noncurrent liabilities 18,000 8.000 Long-term notes payable Total liabilities 167,281 107,757 Equity Share capital-Ordinary, no par value Retained earnings 165,000 140,000 78,622 23,540 243,622 163,540 Total liabilities and equity 410,903 271,297 Additional Information on Year 2019 Transactions Borrowed $42,000 cash by signing a short-term note payable. Interest expense is classified as operating activity. a. b. Required Prepare a statement of cash flows for operating activities using the indirect method

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