The income statement and unclassified statement of financial position for Cullumber, Inc. follow: CULLUMBER, INC. Statement of Financial Position December 31 Assets 2018 2017 Cash $100,000 $47,100 Held for trading investments 123,000 116,000 Accounts receivable 76,000 40,400 Inventory 122,000 94,600 Prepaid expenses 18,600 26,000 Property, plant, and equipment 320,500 289,000 Accumulated depreciation (48,000) (52,400) $712,100 $560,700 Total assets Liabilities and Shareholders' Equity Accounts payable $90,000 $74,800 Liabilities and Shareholders' Equity Accounts payable $90,000 $74,800 Accrued liabilities 11,600 7,600 Bank loan payable 89,500 191,300 Common shares 280,000 165,000 Retained earnings 241,000 122,000 Total liabilities and shareholders' equity $712,100 $560,700 Sales Cost of goods sold Gross profit Operating expenses CULLUMBER, INC. Income Statement Year Ended December 31, 2018 $496,400 187,350 309,050 116,440 Income from operations Other revenues and expenses Unrealized gain on held for trading investments Interest expense Income before income tax Income tax expense Net income Additional information: 192,610 $7,000 (4,800 ) 2,200 194,810 46,000 $148,810 1. Prepaid expenses and accrued liabilities relate to operating expenses. 2. An unrealized gain on held for trading investments of $7,000 was recorded. 3. New equipment costing $89,000 was purchased for $23,800 cash and a $65,200 long-term bank loan payable. 4. Old equipment having an original cost of $57,500 was sold for $1,600. 5. Accounts payable relate to merchandise creditors. quipment having an original cost of $57,500 was sold for $1,600. 5. Accounts payable relate to merchandise creditors. 6. Some of the bank loan was repaid during the year. 7. A dividend was paid during the year. 8. Operating expenses include $46,500 of depreciation expense and a $5,000 loss on disposal of equipment. (a) Prepare the 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).) CULLUMBER, INC. Statement of Cash Flows-Direct Method Cash flows from operating activities Cash receipts from customers Year Ended December 31, 2018 Cash Payments 460600 CULLUMBER, INC. Statement of Cash Flows-Direct Method Year Ended December 31, 2018 Cash flows from operating activities Cash receipts from customers Cash Payments To suppliers 199550 For operating expenses I 53540 4800 For interest For income taxes 46000 Net cash used by operating activities 460800 303890 156910 Net cash used by operating activities Cash flows from investing activities Purchase of equipment Proceeds from disposal of equipment Net cash used by investing activities Cash flows from financing activities Repayment of bank loan payable Payment of cash dividends Sale of common shares Net cash used by financing activities -23800 1600 -167000 -29810 115000 156910 -22200 91810 Payment of cash dividends Sale of common shares Net cash used by financing activities Net increase in cash Cash, January 1 Cash, December 31 -29810 115000 81810 52900 47100 100000 Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ paying $23,800 cash and issuing a $65,200 bank loan payable. 89000 by eTextbook and Media Save for Later Attempts: 1 of 2 used Submit Answer