Problems: Set A 2018 2017 Assets Cash Accounts receivable Inventory Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Total assets Liabilities and Shareholders' Equity Bank overdraft Accounts payable Income tax payable Interest payable Dividends payable Bank loan payable-current portion Bank loan payable-non-current portion Common shares Retained earnings Total liabilities and shareholders' equity $ 23,000 25,000 34,000 100,000 527,000 36,000 55,000 110,000 263,000 (67,000) (100,000) 85,000 40,000 (18,000)10,000) $709,000 $394,00 $0- 43,000 3,000 $ 8,000 26,000 2,000 7,000 1,000 20,000 212,000 88,000 30,000 6,000 3,000 26,000 380,000 198,000 50,000 $709,000 Additional information regarding 2018: 1. Net income was $57,000. 2. A gain of $7,000 was recorded on the disposal of a small parcel of land. No land was purchased during the year. 3. A gain on disposal of $38,000 was recorded when an old building was sold for $50,000 cash. A new building was purchased for $364,000 and depreciation expense on buildings for the year was $55,000. 4. Equipment costing $65,000 was purchased while a loss of $4,000 was recorded on equipment that was sold for $5,000 The equipment that was sold late in the year had accumulated depreciation of $11,000. 5. The company took out $210,000 of new bank loans during the year. 6. Dividends were declared and paid and no common shares were bought back by the company. Instructions (a) Prepare the statement of cash flows using the indirect method. (b) Did the company manage its noncash working capital effectivel (c) How could the company afford to buy a new building