P13.7B (LO 2, 3, 4, 5) (Prepare statement of cash flows (indirect method) and answer questions.) The comparative, unclassified statement of financial position for Summerville Ltd. shows the following balances at December 31: 2024 2023 Assets Cash Term deposits Accounts receivable Inventory Land $ 17,000 $ 12,000 52,000 50,000 60,000 68,000 110,000 200,000 220,000 Buildings 943,000 466,000 Accumulated depreciationbuildings (130,000) (150,000) Equipment 190,000 80,000 Accumulated depreciation-equipment (36,000) $1,354,000 (20,000) $ 778,000 Total assets Liabilities and Shareholders' Equity Accounts payable $ 86,000 $ 68,000 Income tax payable 6,000 4,000 Interest payable 18,000 14,000 Dividends payable 3,000 2,000 Bank loan payable-current portion 52,000 40,000 Bank loan payable-non-current portion 673,000 418,000 Common shares 396,000 172,000 Retained earnings 120,000 60,000 Total liabilities and shareholders' equity $1,354,000 $ 778,000 Additional information for 2024: 1. Net income was $89,000. 2. The term deposits mature in 30 days. 3. A gain of $7,000 was recorded on the disposal of a small parcel of land. No land was purchased during the year. 4. A gain on disposal of $78,000 was recorded when an old building was sold for $90,000 cash. A new building was purchased for $564,000 and depreciation expense on buildings for the year was $55,000. had 5. Equipment costing $140,000 was purchased while a loss of $10,000 was recorded on equipment that was sold for $15,000. The equipment that was sold late in the year accumulated depreciation of $5,000. 6. The company took out $300,000 of new bank loans during the year. 7. Dividends were declared during the year. 8. Common shares were bought back by the company for $26,000, which was the amount at which they were originally issued, and additional shares were issued during the year. Instructions a. Prepare the statement of cash flows using the indirect approach. b. Did the company manage its noncash working capital effectively? c. How could the company afford to buy a new building?