7 The comparative unclassified statement of financial position for Ivanhoe Ltd. follows: IVANHOE LTD. Statement of Financial Position December 31 Assets 2018 2017 Cash $58,000 $23,000 Accounts receivable 83,000 63,500 Inventory 181,000 199,000 Long-term investments 73,000 130,000 Equipment 260,000 160,000 Accumulated depreciation (69,000) (38,000) Total assets $586,000 $537,500 Liabilities and Shareholders' Equity Accounts payable Bank loan payable Common shares Retained earnings $31,000 $ 48,000 121,000 185,500 217,000 174,000 217,000 130,000 Total liabilities and shareholders' equity $586,000 $537,500 Additional information: 1. Net income was $125,900. 2. Sales were $996,000. 3. Cost of goods sold was $756,000. 4. 5. 6. 4 7. 8. 9. 10. 96 Operating expenses were $49,000, exclusive of depreciation expense. Depreciation expense was $31,000. Interest expense was $13,000. Income tax expense was $27,000. Long-term investments were sold at a gain of $5,900. No equipment was sold during the year. $64,500 of the bank loan was repaid during the year. 15 1. Net income was $125,900. 2. Sales were $996,000. 3. Cost of goods sold was $756,000. ly 34567 Operating expenses were $49,000, exclusive of depreciation expense. Depreciation expense was $31,000. Interest expense was $13,000. Income tax expense was $27,000. 8. Long-term investments were sold at a gain of $5,900. No equipment was sold during the year. $64,500 of the bank loan was repaid during the year. 9. 10. 11. Common shares were issued for $43,000. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a sign e.g. -45,000, or in parenthesis e.g. (45,000).) IVANHOE LTD. Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to