The income statement and unclassified statement of financial position for Ivanhoe, Inc. Follow IVANHOE, INC. Statement of Financial Position December 31 Assets 2018 2017 Cash $97,200 $48,000 Held for trading investments 122,000 115,000 Accounts receivable 79,500 42,500 Inventory 122,500 95.000 Prepaid expenses 18,100 27 000 Property, plant, and equipment 308,000 284,500 Accumulated depreciation (47,500) (52,200) Total assets $699,800 $559,800 Liabilities and Shareholders' Equity Accounts payable $98,500 $77,300 Accrued liabilities 11.200 7.300 Bank loan payable 123,100 194,700 Common shares 220,000 155,000 Retained earnings 247,000 125,500 Total liabilities and shareholders' equity $699,800 $559,800 IVANHOE, INC. Income Statement Year Ended December 31, 2018 Sales $550,300 Cost of goods sold 189,450 Gross profit 360,850 Operating expenses 116,460 IVANHOE, INC. Income Statement Year Ended December 31, 2018 Sales $550,300 Cost of goods sold 189,450 Gross profit 360,850 Operating expenses 116,460 Income from operations 244,390 Other revenues and expenses Unrealized gain on held for trading investments $7,000 Interest expense (4,750) 2,250 Income before income tax 246,640 Income tax expense 44,000 Net income $202,640 Additional information: 1 Prepaid expenses and accrued liabilities relate to operating expenses 2 3 An unrealized gain on held for trading investments of $7,000 was recorded. New equipment costing $82,000 was purchased for $24,800 cash and a $57,200 long-term bank loan payable. Old equipment having an original cost of $58,500 was sold for $1,100 Accounts payable relate to merchandise creditors. 4 5 6 Some of the bank loan was repaid during the year 7 A dividend was paid during the year. 8 Operating expenses include $46,700 of depreciation expense and a $6.000 loss on disposal of equipment 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).) IVANHOE, INC. Statement of Cash Flows-Direct Method Year Ended December 31, 2018 Cash nows from operating activities 217840 Cash Payments $ > v $ V $ $ Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ by paying $24,800 cash and issuing a $57,200 bank loan payable