Question 1

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The income statement and unclassified statement of financial position for Ivanhoe, Inc. follow:

IVANHOE, INC. Statement of Financial Position December 31
Assets		2018			2017
Cash		$97,200			$48,000
Held for trading investments		122,000			115,000
Accounts receivable		79,500			42,500
Inventory		122,500			95,000
Prepaid expenses		18,100			27,000
Property, plant, and equipment		308,000			284,500
Accumulated depreciation		(47,500	)		(52,200	)
Total assets		$699,800			$559,800
Liabilities and Shareholders Equity
Accounts payable		$98,500			$77,300
Accrued liabilities		11,200			7,300
Bank loan payable		123,100			194,700
Common shares		220,000			155,000
Retained earnings		247,000			125,500
Total liabilities and shareholders equity		$699,800			$559,800

IVANHOE, INC. Income Statement Year Ended December 31, 2018
Sales					$550,300
Cost of goods sold					189,450
Gross profit					360,850
Operating expenses					116,460
Income from operations					244,390
Other revenues and expenses
Unrealized gain on held for trading investments		$7,000
Interest expense		(4,750	)		2,250
Income before income tax					246,640
Income tax expense					44,000
Net income					$202,640

Additional information:

1.		Prepaid expenses and accrued liabilities relate to operating expenses.
2.		An unrealized gain on held for trading investments of $7,000 was recorded.
3.		New equipment costing $82,000 was purchased for $24,800 cash and a $57,200 long-term bank loan payable.
4.		Old equipment having an original cost of $58,500 was sold for $1,100.
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 $46,700 of depreciation expense and a $6,000 loss on disposal of equipment.

(a) 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 e.g. (15,000).)

Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ by paying $24,800 cash and issuing a $57,200 bank loan payable.