Concord’s Custom Clothing (CCC) sells branded clothing to resorts and corporations. The company’s comparative financial statements are presented below.

CONCORD’S CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION December 31
Current Assets		2020		2019
Cash		151,000		76,100
Accounts receivable		30,000		23,800
Inventory		67,000		44,500
Prepaid expenses		9,700		2,800
Total current assets		257,700		147,200
Property and equipment
Property and equipment		92,000		135,000
Less: Accumulated depreciation		54,800		56,000
Net property and equipment		37,200		79,000
TOTAL ASSETS		$294,900		$226,200
Current liabilities
Accounts payable		26,100		31,500
Salaries payable		8,700		4,900
Interest payable		4,800		7,700
Total current liabilities		39,600		44,100
Loan payable		122,000		110,000
Total liabilities		161,600		154,100
Shareholders' equity
Common shares		19,100		1,500
Retained earnings		114,200		70,600
Total shareholders' equity		133,300		72,100
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$294,900		$226,200

CONCORD’S CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31
		2020		2019
Sales revenue		870,000		752,000
Cost of sales		614,000		537,000
Gross margin		256,000		215,000
Expenses
Salary expense		98,000		91,000
Interest expense		5,100		2,000
Other expenses		7,600		5,800
Depreciation expense		30,000		32,000
Total expenses		140,700		130,800
Operating income		115,300		84,200
Loss on disposal of equipment		7,800		1,000
Income tax expense		28,825		17,700
Net income		78,675		65,500

Following is additional information concerning CCC’s transactions during the year ended December 31, 2020:

●		Equipment costing $35,000 was purchased by paying $24,000 cash and issuing 400 common shares.
●		Equipment costing $78,000 that was purchased at the beginning of 2019 was sold at the end of 2020 for $39,000. Straight-line depreciation had been used with an expected asset life of 5 years and a residual value of $0.
●		The “other expenses” relate to prepaid items.
●		In order to supplement its cash, CCC increased its bank loan by $12,000.
●		Cash dividends of $35,075 were paid at the end of the fiscal year.
●		Cost of sales includes $178,000 of direct labour costs.

Prepare a statement of cash flows for CCC for the year ended December 31, 2020, using the direct method. CCC follows ASPE. Include any note disclosure on non-cash financing and investing transactions.

Answer rating: 100% (QA)

Concords Custom Clothing CCC Statement of cash flow For the year ended December 31 2020 Cash ... View the full answer