INTERMEDIATE FINANCIAL REPORTING 1 UNIT 1 TASK-BASED SIMULATION #1 Simulation (30 minutes) Edward Rashleigh is a corporate accountant with Noble Inc., a small independent book publisher and retailer. Noble has a small storefront and operates an e-commerce site. Edward joined Noble in July of Year 2 (the current year) and is preparing the company's year-end financial statements in accordance with ASPE. He has been asked to prepare the cash flow statement using the direct method. Edward has prepared the following: Appendix I, balance sheetAppendix II, income statementAppendix III, excerpts from the notes to the. Appendix I: Balance sheet Noble Inc. Balance sheet As at December 31 Year 2 Year 1 Draft prepared by management Audited ASSETS Current assets: Cash $ 2,406 $ 17,635 Accounts receivable 379,802 244,477 Inventory 283,906 195,632 Prepaid expenses 26,744 30,611 692,858 488,355 Property, plant, and equipment (net) 840,250 914,355 $1,533,108 $1,402,710 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 377,220 $ 572,604 Income taxes payable 402 11,200 Current portion of term bank loan 28,000 28,000 405,622 611,804 Term bank loan 658,000 686,000 1,063,622 1,297,804 Share capital 13,000 13,000 Retained earnings 456,486 91,906 $1,533,108 $1,402,710