CARLA VISTA, INC. Income Statement Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other revenues and expenses Unrealized gain on held for trading investments $586,050 188,100 397.950 116,500 281,450 $11,000 Interest expense Income before income tax Income tax expense Net income 4,790)6,210 287,660 42,000 $245,660 Additional information: 1. Prepaid expenses and accrued liabilities relate to operating expenses. 2. An unrealized gain on held for trading investments of $11,000 was recorded 3. New equipment costing $86,000 was purchased for $22,300 cash and a $63,700 long-term bank loan payable. 4. Old equipment having an original cost of $64,500 was sold for $1,500. 5. Accounts payable relate to merchandise creditors. 6. Some of the bank loan was repaid during the year. 7. A dividend was paid during the year. 8. Operating expenses include $46,400 of depreciation expense and a $10,600 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 eg. (15,000).) CARLA VISTA, INC. Statement of Cash Flows-Direct Method Cash Payments Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ by paying $22,300 cash and issuing a $63,700 bank loan payable