18) The following information is reported on the comparative balance sheet and income statement of Cashwealth Corp for the year ended Dec 31, Year 8. Prepare the operating section of the statement of cash flows under BOTH the INDIRECT method AND the DIRECT method. (10 points for each method Year 8 Year 7 BALANCE SHEET ASSETS Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Equipment Accumulated Depreciation 38,000 19,000 240,000 250,000 45,000 36,000 10,000 4,000 25,000 50,000 (13,000) (8,000) 345,000 351,000 LIABILITIES AND STOCKHOLDERS' EQUTY Accounts Payable Salaries Payble Bonds Payable Premium on Bonds Payable Common Stock Retained Earnings 40,000 79,000 27,000 15,000 150,000 150,000 (12,000) (17,000) 80,000 80,000 60,000 44,000 345,000 351,000 INCOME STATEMENT Sales Cost of goods sold Operating expenses Salaries Expense Interest Expense Gain on sale of equipment Net Income 610,000 (400,000) (60,000) (100,000) (30,000) 5,000 35,000 Additional information Dividends were declared and paid during year 8. Accounts payable pertains to Inventory only. Operating expenses includes depreciation expense. Equipment costing $25,000 was sold for $20,000 cash at a gain. INDIRECT METHOD DIRECT METHOD