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AA MIT Statement of Financial Position December 31 2021 2020 Assets Cash $ 53,000 $ 22,000 Accounts receivable 80,000 76,000 Inventory 180,000 186,000 Estimated inventory returns 5,000 3,000 Long-term investments 70,000 100,000 Equipment 265,000 200,000 Accumulated depreciation (66,000) (32,000) Total assets 8587,000 $555,000 Liabilities and Shareholders' Equity Accounts payable $ 29,000 $41,000 Refund liability 10,000 6,000 Bank loan payable (noneurrent) 150,000 200,000 Common shares 199,000 174.000 Retained earning 199,000 134,000 Total liabilities and shareholders! equity $587,000 $555,000 Additional information pertaining to 2021: 1. Net income was $115,000. 2. Sales were $978,000. 3. Cost of goods sold was $751,000. 4. Operating expenses were $43,000, exclusive of depreciation expense. 5. Depreciation expense was $34,000. 6. Interest expense was $14,000. 7. Income tax expense was $26,000. 8. Long-term investments were sold at a gain of $5,000. These investments are carried at their cost so gains and losses on these investments are recorded only when the investments are sold. 9. No equipment was sold during the year. 10. $50.000 of the bank loan was repaid during the year. 11. Common shares were issued for $25,000. Instructions Prepare a statement of cash flows using the indirect method. Prepare and evaluate statement of cash flows-indirect method

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