Novak Controls Ltd. is a manufacturer of crash-protected event recorders that are used in railway systems...

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Novak Controls Ltd. is a manufacturer of crash-protected event recorders that are used in railway systems around the world to record event data. These data can be retrieved and analyzed to monitor and improve operations, but also to provide diagnostic data in the event of rail crashes. The small Ottawa-based company has customers across the world, but its largest market is North America. The company has been hurt by the U.S. economy, seeing a 12% decline in sales over the prior year. The company is hoping that the latest industry developments, which call for a significant increase in the shipment of oil by railcar, will mean an increase in sales. In the meantime, the company has been seeking new investors and has approached a leading Canadian venture capital firm to see if it might be interested in investing. As part of its approach, Novak has provided the following financial information for the most recent fiscal year. Assets NOVAK CONTROLS LTD. Statement of Financial Position As at September 30 2024 2023 Current assets: Cash 0 $87,840 Accounts receivable (net) 733,220 461,160 Inventory 927,200 724,680 Total current assets 1,660,420 1,273,680 Equipment 1,961,760 2,327,760 Accumulated depreciation, equipment (1,738,500) (1,756,800) Total assets $1,883,680 $1,844,640 Liabilities and shareholders' equity Current liabilities: Bank indebtedness $26,840 $ 0 Accounts payable 317,200 307,440 Total current liabilities 344,040 307,440 Bank loan payable Common shares Retained earnings 185,440 175,680 1,098,000 1,098,000 256,200 263,520 Total liabilities and shareholders' equity $1,883,680 $1,844,640 NOVAK CONTROLS LTD. Statement of Income For the year ended September 30, 2024 Sales revenue $7,405,400 Cost of goods sold 4,727,500 Gross profit 2,677,900 Wages expense 1,927,600 Utilities expense 353,800 Depreciation expense 274,500 Rent expense 96,380 Interest expense 57,340 Loss from operations (31,720) Gain on sale of equipment 48,800 Earnings before income tax 17,080 Income tax expense 3,660 Net income $13,420 Additional information: 1. During the year, the company repaid principal of $36,600 on its loan payable. 2. During the year, equipment with a net carrying amount of $73,200 was sold. 3. No equipment was purchased during the year. You work for the venture capital firm and have been tasked with preparing the statement of cash flows for Novak using the indirect method for determining cash fl (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) NOVAK CONTROLS LTD. Statement of Cash Flows, Indirect Method $ +A +A $ > > Supplemental Cash Flow information: Cash paid for interest Cash paid for income tax +A +A $ Novak Controls Ltd. is a manufacturer of crash-protected event recorders that are used in railway systems around the world to record event data. These data can be retrieved and analyzed to monitor and improve operations, but also to provide diagnostic data in the event of rail crashes. The small Ottawa-based company has customers across the world, but its largest market is North America. The company has been hurt by the U.S. economy, seeing a 12% decline in sales over the prior year. The company is hoping that the latest industry developments, which call for a significant increase in the shipment of oil by railcar, will mean an increase in sales. In the meantime, the company has been seeking new investors and has approached a leading Canadian venture capital firm to see if it might be interested in investing. As part of its approach, Novak has provided the following financial information for the most recent fiscal year. Assets NOVAK CONTROLS LTD. Statement of Financial Position As at September 30 2024 2023 Current assets: Cash 0 $87,840 Accounts receivable (net) 733,220 461,160 Inventory 927,200 724,680 Total current assets 1,660,420 1,273,680 Equipment 1,961,760 2,327,760 Accumulated depreciation, equipment (1,738,500) (1,756,800) Total assets $1,883,680 $1,844,640 Liabilities and shareholders' equity Current liabilities: Bank indebtedness $26,840 $ 0 Accounts payable 317,200 307,440 Total current liabilities 344,040 307,440 Bank loan payable Common shares Retained earnings 185,440 175,680 1,098,000 1,098,000 256,200 263,520 Total liabilities and shareholders' equity $1,883,680 $1,844,640 NOVAK CONTROLS LTD. Statement of Income For the year ended September 30, 2024 Sales revenue $7,405,400 Cost of goods sold 4,727,500 Gross profit 2,677,900 Wages expense 1,927,600 Utilities expense 353,800 Depreciation expense 274,500 Rent expense 96,380 Interest expense 57,340 Loss from operations (31,720) Gain on sale of equipment 48,800 Earnings before income tax 17,080 Income tax expense 3,660 Net income $13,420 Additional information: 1. During the year, the company repaid principal of $36,600 on its loan payable. 2. During the year, equipment with a net carrying amount of $73,200 was sold. 3. No equipment was purchased during the year. You work for the venture capital firm and have been tasked with preparing the statement of cash flows for Novak using the indirect method for determining cash fl (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) NOVAK CONTROLS LTD. Statement of Cash Flows, Indirect Method $ +A +A $ > > Supplemental Cash Flow information: Cash paid for interest Cash paid for income tax +A +A $