Question 1 View Policies Current Attempt in Progress The income statement and unclassified statement of financial position for Cullumber, Inc. follow: CULLUMBER, INC. Statement of Financial Position December 31 Assets 2018 Cash $99,000 Held for trading investments 126,000 Accounts receivable 70,000 Inventory 122,600 Prepaid expenses 18,300 Property, plant, and equipment 304,500 Accumulated depreciation (46,000) Total assets $694,400 Liabilities and Shareholders' Equity Accounts payable $98,000 Accrued liabilities 11,800 Bank loan payable 131,600 Common shares 210,000 Retained earnings 243,000 Total liabilities and shareholders' equity $694,400 2017 $47,400 113,000 41,100 93,100 27,400 276,000 (53,300) $544,700 $71,900 7,600 189,700 150,000 125,500 $544,700 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 $13,000 Interest expense (4,780) Income before income tax Income tax expense Net income $536,550 188,700 347,850 116,420 231,430 8,220 239,650 40,000 $199,650 Additional information: 1. Prepaid expenses and accrued liabilities relate to operating expenses. 2. An unrealized gain on held for trading investments of $13,000 was recorded. 3. New equipment costing $87,000 was purchased for $20,800 cash and a $66,200 long-term bank loan payable. 4. Old equipment having an original cost of $58,500 was sold for $1,500. 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 $46,600 of depreciation expense and a $3,100 loss on disposal of equipment. 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).) (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 Cash Payments Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ by paying $20,800 cash and issuing a $66,200 bank loan payable. eTextbook and Media