The following financial statements and additional information are reported. 20201 GAMAL INC. Comparative Balance Sheets June 30, 2021 and 2020 2021 Assets Cash S100,600 Accounts receivable.net 69,600 Inventory 65,800 Prepaid expenses 5.200 64,500 51.400 96,700 6.000 Total current assets 241,200 Equipment 129,400 Accum. depreciation Equipment 28,200) 218,6001 115,000 (10,300 Total assets $342.400 323,300 Liabilities and Equity Accounts payable Wages payable Income taxes payable $26,200||32,800 7.900 16,700 2,400 4,300 Total current liabilities Notes payable (long term) 36,500 49,000 53,8001 73,000 85,500 126,800 Total liabilities Equity Common stock, 55 par value Retained earnings 232,000 24,900 189,000 7,500 Total liabilities and equity 342,400||$323.300 GAMAL INC. Income Statement For Year Ended June 30, 2021 Sales S 675.000 Cost of goods sold 105,000 270,000 Gross profit Operating expenses Depreciation expense Other expenses $2,700 66,700 Total operating expenses 119,400 150,600 Other gains (losses) Gain on sale of equipmen 2.200 Income before taxes Income taxes expense 152,800 61.120 Net income 91,680 Additional Information 1. A $24,000 note payable is retired at its $24,000 carrying (book) value in exchange for cash. 2. The only changes affecting retained earnings are net income and cash dividends paid. 3. New cquipment is acquired for $62,600 cash. 4. Received cash for the sale of equipment that had cost $48,200, yielding a $2,200 gain. 5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. 6. All purchases and sales of inventory are on credit. Required a. Prepare a statement of cash flows for the year ended June 30, 2021, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) b. Discuss the main features revealed by this statement. Show workings.

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