The comparative unclassified statement of financial position for Cullumber Ltd. follows: CULLUMBER LTD Statement of Financial Position December 31 2018 2017 Assets Cash Accounts receivable Inventory Long-term investments Equipment Accumulated depreciation Total assets $53,000 $23,000 67,500 183,000 204,000 70,000 105,000 295,000 180,000 (69,000) (30,000) $619,000 $549,500 87,000 Liabilities and Shareholders' Equity Accounts payable Bank loan payable Common shares Retained earnings Total liabilities and shareholders' equity $619,000 $35,000 51,000 144,000 188,500 220,000 170,000 220,000140,000 $549,500 Additional information: 1. Net income was $112,700 2. Sales were $988,000. 3. Cost of goods sold was $758,000 4. Operating expenses were $45,000, exclusive of depreciation expense. 5. Depreciation expense was $39,000 6. Interest expense was $15,000. 7. Income tax expense was $24,000. 8. Long-term investments were sold at a gain of $5,700. 9. No equipment was sold during the year 10. $44,500 of the bank loan was repaid during the year. Common shares were issued for $50,000. 11. Prepare a 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).) Statement of Cash Flows-Direct Method Cash payments Sale of long-term investments Decrease in prepaid expenses Decrease in accounts payable Decrease in accounts receivable Increase in prepaid expenses Repayment of bank loan Purchase of equipment Sale of equipment Issuance of bonds Cash receipts from customers Decrease in accrued expenses payable For operating expenses Increase in accounts receivable Gain on disposal of land Issue of common shares Purchase of land Depreciation expense Payment of cash dividends For income tax Increase in merchandise inventory Profit For interest Decrease in merchandise inventory To suppliers Loss on disposal of land Increase in accounts payable Increase in accrued expenses payable Cash, January 1 Cash, December 31 Cash flows from financing activities Cash flows from investing activities Cash flows from operating activities Net cash provided by financing activities Net cash provided by investing activities Net cash provided by operating activities Net cash used by financing activities Net cash used by investing activities Net cash used by operating activities Net decrease in cash Net increase in cash