The following information was drawn from the financial records of The Lord of the Rings Corporation, as at the company's fiscal year-end, September 30, 2018 2018 2017 Assets Cash 325,000 428.000 Accounts receivable 465,000 318.000 Inventory 675,000 800.000 Prepaid operating expenses 119.000 130,000 Long term Investments 350,000 500.000 Equipment 1,850,000 1,785,000 Less: Accumulated depreciation (525.000) (410.000) 3.259.000 3,551,000 Liabilities and Shareholders' Equity Accounts payable 322,000 272.000 Current income tax payable 116.000 167,000 Future income tax liability 15,000 12,000 Bonds payable 718,000 1,200,000 Common shares 625,000 600,000 Retained earnings 1,463,000 1,300.000 3,259.000 3,551,000 The Lord of the Rings Income Statement For the year ended September 30, 2018 Sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Gain on sale of equipment Income before income tax Income tax expense: Current Future Net income 1.940,200 1.259.000 681.200 421,600 259,600 7,200 12,500 264,900 62.800 3,000 199.100 ADDITIONAL INFORMATION: - Depreciation expense is included in "operating expenses." - Accounts payable is related to the purchase of inventory. - During the year, a piece of equipment that originally cost $125,000 was sold for cash. The equipment was 30% depreciated at the time of the sale. - Long-term investments were sold for cash during the year. REQUIRED: a. Prepare, in good form, a statement of cash flows for The Lord of the Rings Corporation using the direct method. (17 Marks) b. Prepare, in good form, only the Operating Activities section of a statement of cash flows for The Lord of the Rings Corporation using the indirect method. (4 Marks)