Question 23 Waterway Industries has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Waterway Industries for 2019 and 2018 are provided below. BALANCE SHEETS 12/31/19 12/31/18 Cash $410000 $ 190000 Accounts receivable 358000 217000 Inventory 383000 481000 Property, plant and equipment $610000 $962000 Less accumulated depreciation (322000) (303000) 288000 659000 $1439000 $1547000 Accounts payable $176000 95000 Income taxes payable 354000 392000 Bonds payable 361000 600000 Common stock 215000 215000 Retained earnings 333000 245000 $1439000 $1547000 INCOME STATEMENT For the Year Ended December 31, 2019 Sales revenue $8410000 Cost of sales 7151000 Gross profit 1259000 Selling expenses $598000 Administrative expenses 191000 789000 Income from operations 470000 Interest expense 70000 Income before taxes 400000 Income taxes 94000 s306000 Net income The following additional data were provided: 1. Dividends for the year 2019 were $191000. 2. During the year, equipment was sold for $242000. This equipment cost $354000 originally and had a book value of $288000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. 3. All depreciation expense is in the selling expense category. The net cash provided by operating activities is $437000 O$306000. $260000. $222000