20X1 20X0 Assets Cash $ 24 $ 110 Accounts receivable 178 132 Prepaid insurance 7 3 Inventory 285 175 Buildings and equipment 400 240 Less: Accumulated depreciation (119) (130) $775 $ 530 Liabilities Accounts payable $ 87 $ 100 Accrued liabilities 6 11 Notes payable 50 0 Bonds payable 160 0 Shareholders' Equity Common stock 400 400 Retained earnings 72 19 $775 $530 NARDO, INC. Statement of Income For Year Ended December 31, 20X1 ($ in millions) Revenues Sales revenue $2,000 Expenses Cost of goods sold $1,400 Depreciation expense 50 Operating expenses 447 1,897 Net income $ 103 During 20X1, $260 million of equipment was purchased (and paid cash) to replace $100 million of equipment (61% depreciated) sold at book value (cash). Required: Use the information above to calculate the various individual accruals and reconcile the net income with the cash flow for the year 20X1 for Nardo, Inc.. For each accrual indicate the extent to which it may be considered discretionary (or not) and explain why.