The balance sheet and income statement for Rural Hospital are presented on the following slides: Rural Hospital Balance Sheet As of December 31 Cash Accounts Receivable Supplies Inventory Long-term Investments Property and equipment Less: Accumulated Depreciation Total Assets Year 2 $68,250 22,250 15,250 98,500 110,750 159.000) $256,000 Year 1 $63,500 18,000 22,250 65,900 84,100 (45,750) $208,000 Rural Hospital Balance Sheet As of December 31 Accounts Payable Wages Payable Notes Payable, long-term Permanently restricted net assets Unrestricted net assets Total liabilities and net assets Year 2 $9,000 4,000 59,500 98,500 85,000 $256,000 Year 1 $19,000 1,200 71,000 65,900 50,900 $208,000 Rural Hospital Statement of Operations and Changes in Net Assets For the Year Ended December 31, Year 2 $195,000 104,650 13,250 43,000 34,100 Patient Service Revenue Wages Expense Depreciation Expense Other Expense Excess Revenue over Expense(increase in unrestricted net assets Contributions to Endowment Increase in Permanently Restricted Net Assets Increase in Net Assets Net Assets, January 1, Year 2 Net Assets, December 31, Year 2 32.600 32,600 66,700 116,800 $183,500 Additional information: 1. Bought equipment for cash, $26,650 2. Paid $11,500 on the long-term note payable. 3. Received a permanently restricted donation of $32,600 cash which was immediately invested in long-term investments. Other expenses relate to medical supplies expense and other miscellaneous expenses. 5. Accounts payable includes purchases for medical supplies and other expenses made on credit. 6. Inventory and accounts payable should be grouped with other expenses. Required: Prepare a schedule of cash flows from operating activities using the direct method for the year ended, December 31, Year 2. This is an individual