financial statements presented in P13.5B for Nackawic Inc. Assets Cash Accounts receivable Inventory Nackawic Inc. Statement...

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financial statements presented in P13.5B for Nackawic Inc. Assets Cash Accounts receivable Inventory Nackawic Inc. Statement of Financial Position December 31 Estimated inventory returns Long-term investments Equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity 2024 2023 $ 82,700 $ 47,250 80,800 37,000 130,200 101,550 1,700 1,100 94,500 107,000 290,000 205,000 (49,500) (40,000) $630,400 $458,900 Accounts payable $ 62,700 $ 48,280 Property tax payable 11,200 18,130 Refund liability 900 700 Bank loan payable-current portion 126,000 60,000 Bank loan payable-non-current portion 14,000 10,000 Common shares 240,000 200,000 Retained earnings 175,600 121,790 Total liabilities and shareholders' equity $630,400 $458,900 Nackawic Inc. Statement of Income Year Ended December 31, 2024 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other income and expenses Interest expense $12,940 Realized loss on sale of long-term investments 7,500 20,440 Income before income tax Income tax expense Net income 115,480 27,670 $ 87,810 $317,500 99,460 218,040 82,120 135,920 Additional information regarding 2024: 1. Long-term investments were sold for $5,000, resulting in a realized loss of $7,500. 2. New equipment costing $141,000 was purchased for $71,000 cash and a $70,000 bank loan payable. 3. Equipment costing $56,000 was sold for $15,550, resulting in a gain of $8,750. 4. Accounts payable relate to merchandise suppliers; property tax payable relates to operating expenses. 5. A dividend was paid during the year. 6. Operating expenses include $58,700 of depreciation expense and an $8,750 gain on disposal of equipment. 7. The company issued common shares for $60,000 cash and bought back and retired some other common shares at the cost they were originally issued at. Instructions a. Prepare the statement of cash flows using the direct method. b. Nackawic's cash position increased by 75% between 2024 and 2023. Identify the primary reason(s) for this significant increase. financial statements presented in P13.5B for Nackawic Inc. Assets Cash Accounts receivable Inventory Nackawic Inc. Statement of Financial Position December 31 Estimated inventory returns Long-term investments Equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity 2024 2023 $ 82,700 $ 47,250 80,800 37,000 130,200 101,550 1,700 1,100 94,500 107,000 290,000 205,000 (49,500) (40,000) $630,400 $458,900 Accounts payable $ 62,700 $ 48,280 Property tax payable 11,200 18,130 Refund liability 900 700 Bank loan payable-current portion 126,000 60,000 Bank loan payable-non-current portion 14,000 10,000 Common shares 240,000 200,000 Retained earnings 175,600 121,790 Total liabilities and shareholders' equity $630,400 $458,900 Nackawic Inc. Statement of Income Year Ended December 31, 2024 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other income and expenses Interest expense $12,940 Realized loss on sale of long-term investments 7,500 20,440 Income before income tax Income tax expense Net income 115,480 27,670 $ 87,810 $317,500 99,460 218,040 82,120 135,920 Additional information regarding 2024: 1. Long-term investments were sold for $5,000, resulting in a realized loss of $7,500. 2. New equipment costing $141,000 was purchased for $71,000 cash and a $70,000 bank loan payable. 3. Equipment costing $56,000 was sold for $15,550, resulting in a gain of $8,750. 4. Accounts payable relate to merchandise suppliers; property tax payable relates to operating expenses. 5. A dividend was paid during the year. 6. Operating expenses include $58,700 of depreciation expense and an $8,750 gain on disposal of equipment. 7. The company issued common shares for $60,000 cash and bought back and retired some other common shares at the cost they were originally issued at. Instructions a. Prepare the statement of cash flows using the direct method. b. Nackawic's cash position increased by 75% between 2024 and 2023. Identify the primary reason(s) for this significant increase.