Question 1. The comparative statements of financial position of Kraco Inc. for 2018 and 2019 appear as follows. (100 points) 2018 2019 736,000 (104,000) Assets Buildings Less: Accumulated depreciation-Buildings Land Supplies Accounts receivable Cash Total 34,000 90,000 28,000 784,000 328,000 (32,000) 300,000 38,000 45,000 8,000 687,000 Equity and Liabilities Share capital-ordinary Retained earnings Bonds Payable Accounts payable Total 480,000 46,000 231,000 27,000 784,000 300,000 24,000 341,000 22,000 687,000 Below is given additional information related to revenues, expenses and dividends for year 2019. Sales revenue 350,000 Sales discounts 3,500 Gain from sale of Land 20,000 Cost of goods sold 220,000 Delivery expenses 10,000 Depreciation of Office Buildings 20,000 Advertising Expenses 2,500 Other Administrative expenses 6,750 Interest expense 6,000 Sales returns and allowances 32,500 Cash dividends paid on ordinary shares 33,000 Effective Tax Rate 20% Required a) Prepare an Income Statement for 2019. (See chapter 4) (30 points) b) Using information from the comparative Statements of Financial Position and Income Statement prepare a Statement of Cash Flows for 2019. (See Chapter 5) (50 points) c) Explain in your own words the reason for each adjustment you made to Net Income in the Operating Section of the Statement of Cash Flows. (20 points)