Question two: Use the indirect method to prepare the cash flow statement for Magna Fax Inc. for the year ended Dec 31st, 2019 Magna Fax, Inc. Income Statement For the Year Ended December 31, 2019 Sales revenue $150000 Cost of goods sold 117.500 Gross profits $ 32,500 Selling expense 4,500 General and administrative expense 4,000 Depreciation expense 4.000 Operating profits $ 20,000 Interest expense Net profit before taxes $ 17,500 Taxes (40%) 7.000 Net profit after taxes $ 10,500 2300 Magna Fax, Inc. Balance Sheet For the Years Ended December 31, 2018 and 2019 2019 2018 $ 24,000 $ 21,000 39,000 27,000 $40,000 18.000 Assets Cash Accounts receivable Inventory Gross fixed assets Acc. Depreciation Net fixed assets Total assets Liabilities and Equity Accounts payable Notes payable Accruals Long-ler m debts Common stock at par Paid-in capital in excess of par Retained eamings Total liabilities and equity 45.000 30,000 $42.000 22000 20.000 $119,000 $ 25,000 50,000 1,000 10000 1000 4000 28.000 $119,000 22.000 $109,000 $ 30,000 40,000 2.000 8,000 1,000 4000 24.000 $109,000