Question 2 (3.5 Points/0.175 point each) The operations of the BU Inn, a small lodging operation, are becoming more complex. The owner has asked for your help in preparing her statement of cash flows. The owner is able to present you with condensed balance sheets and some additional information. one SHA Inn Condensed Balance Sheets December 31, 2017 and 2018 00.A d 2017 2018 Cash $10,000 $8,000 Accounts receivable 26,500 22,500 Investments 10,000 20,000 Equipment 200,000 320,000 Accumulated depreciation (20,000) (59,000) Total assets $226,500 $311,500 Current liabilities Accounts payable $18,000 $21,000 Mortgage payagle (current) 5,000 22,000 Dividends payable 5,000 8,000 Noncurrent liabilities Notes payable Common Stock 75,000 110,000 50,000 70,000 Retained earnings 73,500 80,500 Total liabilities and owners' equity $226,500 $311,500 Additional Information: a. Assume equipment costing $20,000 and fully depreciated was sold for $5,000 during 2018. b. Assume long-term investment costing $10,000 were sold for $12,000. C. Common stock of 20,000, was sold and long-term debt was borrowed during 2018. There were no non cash financing or investing activities during 2018. d. The SHA inn generated net income of $17,000 during 2018. e. Assume all current liabilities are paid on a timely basis. f. Assume all long-term debt is reclassified as current liabilities on December 31 of the year prior to its payment. g. Assume the change in retained earnings is due only to dividends declared and ne income from operations. Dividends declared during 2018 totaled $10,000. Required: Prepare the SCF using the indirect method. SHA INN Statement of Cash Flows For the year of 2018 Cash Flow Provided by Operating Activities: Net income Adjustments vlup Depreciation expense Gain on Sale of equipment 3) Gain on Sale of Investment 4) Decrease in A/R 5) Increase in A/P 6) Net Cash Flow from Operating Activities 7) Cash Flow Provided by Investing Activities: Proceeds from sale of equipment 8) Proceeds from sale of investment 9) Purchase of equipment 10) Purchase of investment 11) Net Cash flows from Investing activities 12) Cash Flow Provided by Financing activities Payment of long-term debt 13) Borrowing-long-term debt 14) Proceeds from sale of common stock 15) Payments of dividends 16) Net Cash flow from Financing Activities Decrease in Cash