37. (9 points) G Company's balance sheets as of 12-31-18 and 12-31-19 and its income statement for the year ended 12-31-19 follow: Cash Short-term accounts receivables from customers, net Prepaids Plant assets Accumulated depreciation 12-31-18 $1,513,000 750,000 275,000 2,800,000 (1,300,000) $4.038.000 12-31-19 $992,000 700,000 300,000 3,784,000 (1,540,000) $4.236.000 Short-term debt Accrued liabilities Asset retirement obligations Bonds payable, net Common stock ($1 par value) Additional paid-in-capital, common stock Retained earnings 250,000 137,428 13,727 748,845 100,000 1,925,000 863.000 $4.038.000 224,000 233,183 20,904 545,913 100,000 1,925,000 1,187.000 $4.236.000 Sales Operating expenses Other gains/losses, net Interest expense Income before taxes Income tax expense Net income $4,500,000 3,600,000 5,517 223,000 671,483 147.483 $524.000 Additional information for G follows: During 2019, G recorded a $10,000 impairment loss on one of its plant assets. On 01-01-17. G purchased a machine for $100,000. G started using the machine on 01-01-17. G estimates it will use the machine for 5 years. At the end of the 5th year, G will have to dispose of the machine at an estimated cost of $15,000. Assume as of 01-01- 17 the interest rate on US Treasury securities was 1% and G's credit standing required a 2% risk premium. On 01-01-19. G purchased a machine for $80,000. G started using the machine on 01-01-19. G estimates it will use the machine for 4 years. At the end of the 4th year, G will have to dispose of the machine at an estimated cost of $7,500. Assume as of 01-01- 19 the interest rate on US Treasury securities was 1.25% and G's credit standing required a 2.25% risk premium. On 12-31-15, G issued $350,000 of its 4%, 5-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 4% interest. At the time of issuance, Gincurred and paid $4,000 of bond issuance costs. On 12-31-16, G issued $400,000 of its 4.25%, 6-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 4%. At the time of issuance, G incurred and paid $4,500 of bond issuance costs. On 06-30- 19, after making its semi-annual interest payment, G retired the bonds at 99. On 12-31-19, G issued $200,000 of its 3%, 3-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 3.25% interest. At the time of issuance, Gincurred and paid $1,800 of bond issuance costs. During 2019, G declared and distributed cash dividends on its outstanding common stock. On G's income statement, the operating expenses" caption includes, but is not limited to, depreciation AND accretion expenses. G's interest expense reported on its income statement is only on money borrowed on both a short-term and long-term basis. On G's income statement, the "Other gains/losses, net" caption represents any gains/losses on bond retirements and any impairment losses. G records adjusting journal entries only once a year as of year-end. Prepare G's statement of cash flows using the DIRECT method for the year ended 12-31-19. Label each section amount as cash provided by OR cash used in. Make sure the description of the items within each section are clear. Include any necessary disclosures required using the DIRECT method. 37. (9 points) G Company's balance sheets as of 12-31-18 and 12-31-19 and its income statement for the year ended 12-31-19 follow: Cash Short-term accounts receivables from customers, net Prepaids Plant assets Accumulated depreciation 12-31-18 $1,513,000 750,000 275,000 2,800,000 (1,300,000) $4.038.000 12-31-19 $992,000 700,000 300,000 3,784,000 (1,540,000) $4.236.000 Short-term debt Accrued liabilities Asset retirement obligations Bonds payable, net Common stock ($1 par value) Additional paid-in-capital, common stock Retained earnings 250,000 137,428 13,727 748,845 100,000 1,925,000 863.000 $4.038.000 224,000 233,183 20,904 545,913 100,000 1,925,000 1,187.000 $4.236.000 Sales Operating expenses Other gains/losses, net Interest expense Income before taxes Income tax expense Net income $4,500,000 3,600,000 5,517 223,000 671,483 147.483 $524.000 Additional information for G follows: During 2019, G recorded a $10,000 impairment loss on one of its plant assets. On 01-01-17. G purchased a machine for $100,000. G started using the machine on 01-01-17. G estimates it will use the machine for 5 years. At the end of the 5th year, G will have to dispose of the machine at an estimated cost of $15,000. Assume as of 01-01- 17 the interest rate on US Treasury securities was 1% and G's credit standing required a 2% risk premium. On 01-01-19. G purchased a machine for $80,000. G started using the machine on 01-01-19. G estimates it will use the machine for 4 years. At the end of the 4th year, G will have to dispose of the machine at an estimated cost of $7,500. Assume as of 01-01- 19 the interest rate on US Treasury securities was 1.25% and G's credit standing required a 2.25% risk premium. On 12-31-15, G issued $350,000 of its 4%, 5-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 4% interest. At the time of issuance, Gincurred and paid $4,000 of bond issuance costs. On 12-31-16, G issued $400,000 of its 4.25%, 6-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 4%. At the time of issuance, G incurred and paid $4,500 of bond issuance costs. On 06-30- 19, after making its semi-annual interest payment, G retired the bonds at 99. On 12-31-19, G issued $200,000 of its 3%, 3-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 3.25% interest. At the time of issuance, Gincurred and paid $1,800 of bond issuance costs. During 2019, G declared and distributed cash dividends on its outstanding common stock. On G's income statement, the operating expenses" caption includes, but is not limited to, depreciation AND accretion expenses. G's interest expense reported on its income statement is only on money borrowed on both a short-term and long-term basis. On G's income statement, the "Other gains/losses, net" caption represents any gains/losses on bond retirements and any impairment losses. G records adjusting journal entries only once a year as of year-end. Prepare G's statement of cash flows using the DIRECT method for the year ended 12-31-19. Label each section amount as cash provided by OR cash used in. Make sure the description of the items within each section are clear. Include any necessary disclosures required using the DIRECT method