Question 1 View Policies Current Attempt in Progress The income statement and unclassified statement of financial position for Cullumber, Inc. follow: Cash CULLUMBER, INC. Statement of Financial Position December 31 Assets 2018 $100,000 Held for trading investments 123,000 Accounts receivable 76,000 Inventory 122,000 Prepaid expenses 18,600 Property, plant, and equipment 320,500 Accumulated depreciation (48,000) Total assets $712,100 Liabilities and Shareholders' Equity Accounts payable $90,000 Accrued liabilities 11,600 Bank loan payable 89,500 Common shares 280,000 Retained earnings 241,000 Total liabilities and shareholders' equity $712,100 2017 $47,100 116,000 40,400 94,600 26,000 289,000 (52,400) $560,700 $74,800 7,600 191,300 165,000 122,000 $560,700 CULLUMBER, INC. Income Statement Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other revenues and expenses Unrealized gain on held for trading investments $7,000 Interest expense (4,800 ) Income before income tax Income tax expense Net income $496,400 187,350 309,050 116,440 192,610 2,200 194,810 46,000 $148,810 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 $89,000 was purchased for $23,800 cash and a $65,200 long-term bank loan payable. 4. Old equipment having an original cost of $57,500 was sold for $1,600. 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 $46,500 of depreciation expense and a $5,000 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).) CULLUMBER, INC. Statement of Cash Flows-Direct Method Year Ended December 31, 2018 Cash flows from operating activities Cash receipts from customers 460800 Cash Payments To suppliers 199550 For operating expenses 53540 For interest For income taxes Net cash provided by operating activities Cash flows from investing activities Purchase of equipment Net cash used by investing activities Cash flows from financing activities Payment of cash dividends Repayment of bank loan payable Sale of common shares Net cash used by financing activities Net increase in cash Cash, January 1 Cash, December 31 Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ by paying $23,800 cash and issuing a $65,200 bank loan payable. e Textbook and Media Save for Later Last saved 23 hours ago. Attempts: 0 of