Question 1 View Policies Current Attempt in Progress The income statement and unclassified statement of financial position for Wildhorse, Inc. follow: WILDHORSE, INC. Statement of Financial Position December 31 Assets 2018 2017 Cash $99,800 $48,400 Held for trading investments 128,000 115,500 Accounts receivable 80,000 41,700 Inventory 123,100 94,300 Prepaid expenses 19,000 26,400 Property, plant, and equipment 285,000 259,000 Accumulated depreciation (47,000) (52,800) Total assets $687,900 $532,500 Liabilities and Shareholders' Equity Accounts payable $90,500 $76,400 Accrued liabilities 10,400 7,000 Bank loan payable 134,000 168,100 Common shares 210,000 170,000 Retained earnings 243,000 111,000 Total liabilities and shareholders' equity $687,900 $532,500 WILDHORSE, 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 $12,500 Interest expense (4,800) Income before income tax Income tax expense Net income $584,400 186,000 398,400 116,460 281,940 7,700 289,640 43,000 $246,640 Additional information: 1. Prepaid expenses and accrued liabilities relate to operating expenses. 2. An unrealized gain on held for trading investments of $12,500 was recorded. 3. New equipment costing $90,000 was purchased for $22,600 cash and a $67,400 long-term bank loan payable. 4. Old equipment having an original cost of $64,000 was sold for $1,800. 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 $46,100 of depreciation expense and a $10,300 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).) $ WILDHORSE, INC. Statement of Cash Flows-Direct Method Year Ended December 31, 2018 4 Cash flows from financing activities Cash receipts from customers Cash Payments To suppliers For operating expenses For income taxes For interest Net cash provided by operating activities $ Cash flows from investing activities Proceeds from disposal of equipment Purchase of equipment Net cash provided by investing activities Cash flows from financing activities Sale of common shares Repayment of bank loan payable Payment of cash dividends 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 $22,600 cash and issuing a $67,400 bank loan payable