The following is ACE Corporation's comparative statement of financial position at December 31, 2018 and 2017 ACE Corporation Comparative Statement of Financial Position December 31, 2018 $1,653,500 (582,500) 155,000 125,000 925,000 564,000 407,500 $3.247.500 December 31, 2017 $1,483,500 (520,000) 137,500 Property, Plant, and Equipment Accumulated Depreciation Equity investment (TWIN Corp.) Debt investment Inventories Accounts Receivable Cash Total Assets 857,500 584,000 350.000 $2.892.500 $ 250,000 1,340,000 750,000 Share capital-ordinary, $1 par Retained Earnings Bonds payable Finance lease obligation Accounts Payable Income Taxes Payable Dividends Payable Total equity and liabilities $ 450,000 1,485,000 500,000 200,000 557,500 15,000 40,000 $3,247.500 477,500 25,000 50,000 $2.892.500 TURN OVER QUESTION 1 (cont'd) Additional information: i. ii. iii. On December 31, 2017, ACE Corporation acquired 25% of TWIN Co.'s common stock for $137,500. TWIN reported income of $70,000 for the year ended December 31, 2018. No dividend was paid on TWIN's common stock during the year. During 2018, ACE loaned $150,000 to PAL Co., an unrelated company. PAL made the first semiannual principal repayment of $25,000, plus interest at 10%, on December 31, 2018. On January 2, 2018, ACE sold equipment costing $30,000, with a carrying amount of $19,000, for $20,000 cash. On December 31, 2018, ACE entered into a capital lease for a building. The annual rental payments is $200,000, which equals the fair value of the building. ACE made the first rental payment of $30,000 when due on January 2, 2019. Net income for 2018 was $185,000. ACE declared and paid cash dividends for 2018 and 2017 as shown below. iv. V. vi. Year Declared Paid Amount 2018 December 15, 2018 February 28, 2019 $40,000 2017 December 15, 2017 February 28, 2018 $50,000 Required a) Prepare a statement of cash flows for the year ending December 31, 2018. (25 marks)