(a) Prepare the statement of cash flows, using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

The income statement and unclassified statement of financial position for Sheridan, Inc. follow: SHERIDAN, INC. Statement of Financial Position December 31 2018 2017 Assets Cash Held for trading investments Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable Accrued liabilities Bank loan payabl Common shares Retained earnings Total liabilities and shareholders' equity $98,400 $47,000 129,000 112,000 41,200 94,650 27,000 277,000 253,500 45,000) (53,800) $676,900 $521,550 75,500 123,400 18,600 $96,500 $71,000 7,300 43,000 175,250 280,000 160,000 246,000 108,000 $521,550 11,400 $676,900 SHERIDAN, INC. Income Statement Year Ended December 31,2018 $503,550 188,400 315,150 116,420 198,730 Sales Cost of goods sold Gross pront Operating expenses Income from operations Other revenues and expenses Unrealized gain on held for trading investments Interest expense Income before income tax Income tax expense Net income $17,000 (4,710) 12,290 211,020 48,000 $163,020 Additional information: 1. 2. 3. 4. 5. 6. 7. 8. Prepaid expenses and accrued liabilities relate to operating expenses An unrealized gain on held for trading investments of $17,000 was recorded New equipment costing $86,000 was purchased for $20,600 cash and a $65,400 long-term bank loan payable. Old equipment having an original cost of $62,500 was sold for $1,100. Accounts payable relate to merchandise creditors Some of the bank loan was repaid during the year. A dividend was paid during the year Operating expenses include $46,100 of depreciation expense and a $6,500 loss on disposal of equipment. Prepare the statement of cash flows, using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) SHERIDAN, INC. Statement of Cash Flows-Direct Method Cash Payments by paying $20,600 cash Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ and issuing a $65,400 bank loan payable