The comparative unclassified statement of financial position for Pharoah Ltd. follows: PHAROAHLTD. Statement of Financial Position December 31 Assets 2021 2020 Cash $54,000 $29,000 Accounts receivable 83.000 78,500 Inventory 180,000 186,500 Estimated inventory returns 5.000 3,000 Long-term investments 72.000 110,000 Equipment 250.000 194,000 Accumulated depreciation 178.000) (32.000 $566,000 $569.000 Total assets Liabilities and Shareholders' Equity Accounts payable $32,000 Refund liability $ 42,500 7,000 4,000 Bank loan payable (noncurrent) 113,000 203,500 Common shares 207.000 179,000 Retained earnings 207.000 140.000 Total liabilities and shareholders' equity $566,000 $569,000 Additional information pertaining to 2021: 1. Net income was $110.300. 2. Sales were $982,000. 3. Cost of goods sold was $750,000 4. Operating expenses were $40,000, exclusive of depreciation expense. 4. Operating expenses were $40,000, exclusive of depreciation expense. Depreciation expense was $46,000. 5. 6. Interest expense was $18,000 7. 8. 9. Income tax expense was $23.000 Long-term investments were sold at a gain of $5,300. No equipment was sold during the year 590,500 of the bank loan was repaid during the year. Common shares were issued for $28.000 10. 11 Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash low with either synes 45,000. crin parenthesis es (45,000) PHAROAH LTD. Statement of Cash Flows-Indirect Method Year Ended December 31, 2021 PHAROAH LTD. Statement of Cash Flows-Indirect Method Year Ended December 31, 2021 Cash flows from operating activities Net income 110000 Adjustments to reconcile net income to Nutcash provided by operating activities Depreciation expense $ 46000 Gain on sale of long-term investments 5300 Increase in accounts receivable 4500 Decrease in inventory 4500 Decrease in inventory 7.16/9 HII 6500 Decrease in accounts payable 10500 Increase in refund ability 3000 Increase in estimated inventory returns 2000 33000 Net cash provided by operating activities 143500 Cashows from investing activities Proceeds from sale of one terminestments $ 43300 Purchase a equipment 58000 1200 Netch used by investing activities Net cash used by investing activities 7.16/9 ! III 12700 Cash flows from financing activities Issue of common shares 28000 Repayment of bank loan 90500 Payment of cash dividends 43300 Net caused by hinancing activities 105000 Net increieinash 25000 Cash January 1 Cist, December 31