PS-3 Preparing a Statement of Cash Flows (Indirect Method) (CAPS-3) L05-2,5-7 The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below: MIKOS INC. Comparative Statements of Financial Position December 31 2021 2020 Assets Cash $ 9.000 $ 17,000 20,000 Short-term investments 45,000 68,000 26.000 Accounts receivable Inventories, at cost Prepaid expenses Land 54,000 4.000 40.000 6.000 45,000 280,000 Property, plant, and equipment, net Intangible assets 70,000 179,000 28.000 24,000 $529,000 $386,000 $ 17,000 6.000 $ 40,000 1.000 Liabilities and Shareholders' Equity Accounts payable Income tax payable Accrued liabilities Long-term notes payable Contributed capital Retained earnings 10,000 150,000 60,000 110,000 200.000 186,000 $529,000 135.000 $386,000 MIKOS INC. Statement of Earnings For the Year Ended December 31, 2021 Sales $850,000 $430,000 4.000 33,000 221,000 Cost of sales Amortization expense-intangible assets Depreciation expense-property, plant, and equipment Operating expenses Interest expense Earnings before income taxes Income tax expense Net earnings 12.000 700.000 150.000 45,000 $105,000 Page 295 Additional information is as follows: a. Land was sold for cash at its carrying amount. b. The short-term investments will mature in February 2022. c. Cash dividends were declared and paid in 2021. d. New equipment with a cost of $166,000 was purchased for cash, and old equipment was sold at its carrying amount. e. Long-term notes of $10,000 were paid in cash, and notes of $30,000 were converted to shares. Required: 1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021. Use the indirect method to report cash flows from operating activities. 2. Assume the role of a bank loan officer who is evaluating this company's cash flow situation. Analyze the statement of cash flows you prepared in (1). 3. What additional information does the statement of cash flows provide that is not available on either the statement of financial position or the statement of earnings? Explain