ACE Corporation's comparative statement of financial position at December 31, ACE Corporation Comparative Statement of Financial Position December 31, December 31, 2018 Plant, and Equipment $1,653,500 2017 $1,483,500 ted Depreciation (582,500) (520,000) estment (TWIN Corp.) 155,000 137,500 stment 125,000 S 925,000 857,500 Receivable 564,000 584,000 407,500 350,000 ets $3.247.500 $2.892.500 The following is ACE Corporation's comparative statement of financial position at December 31, 2018 and 2017. ACE Corporation Comparative Statement of Financial Position December 31, December 31, Property, Plant, and Equipment 2018 $1,653,500 2017 $1,483,500 Accumulated Depreciation (582,500) (520,000) Equity investment (TWIN Corp.) Debt investment 155,000 137,500 125,000 Inventories 925,000 857,500 Accounts Receivable 564,000 584,000 Cash 407,500 350,000 Total Assets $3.247.500 $2.892.500 Share capital-ordinary, $1 par $450,000 $250,000 Retained Earnings 1,485,000 1,340,000 Bonds payable 500,000 750,000 Finance lease obligation 200,000 Accounts Payable 557,500 477,500 Income Taxes Payable 15,000 25,000 Dividends Payable 40,000 50.000 Total equity and liabilities $3.247.500 $2.892,500 vi. i. QUESTION 1 (cont'd) Additional information: On December 31, 2017, ACE Corporation acquired 25% of TWIN Co.'s common stock for $137,500. TWIN reported income of $70,000 for the year ended December 31, 2018. No dividend was paid on TWIN's common stock during the year. During 2018, ACE loaned $150,000 to PAL Co., an unrelated company. PAL made the first semiannual principal repayment of $25,000, plus interest at 10%, on December 31, 2018. On January 2, 2018, ACE sold equipment costing $30,000, with a carrying amount of $19,000, for $20,000 cash. On December 31, 2018, ACE entered into a capital lease for a building. The annual rental payments is $200,000, which equals the fair value of the building. ACE made the first rental payment of $30,000 when due on January 2, 2019. Net income for 2018 was $185,000. ACE declared and paid cash dividends for 2018 and 2017 as shown below. Year Declared Paid Amount 2018 December 15, 2018 2017 December 15, 2017 February 28, 2019 February 28, 2018 $40,000 $50,000 Required a) Prepare a statement of cash flows for the year ending December 31, 2018. (25 marks)