The financial statements of Resolute Inc. are presented here:

RESOLUTE INC.

Statement of Financial Position

December 31

RESOLUTE INC.
Income Statement
Year Ended December 31, 2015
Sales .................................................................. $256,000
Cost of goods sold ....................................................140,000
Gross profit .............................................................116,000
Operating expenses ......................................................78,250
Profit from operations ..................................................37,750
Interest expense ...........................................................4,000
Profit before income tax ...............................................33,750
Income tax expense ......................................................6,000
Profit ...................................................................$ 27,750
Additional information:
1. Equipment was sold during the year for $8,500 cash. The equipment originally cost $12,000 and had a carrying amount of $8,500 at the time of sale.
2. Equipment costing $14,000 was purchased in exchange for $4,000 cash and a $10,000 long-term bank loan.
3. Accounts payable relate to merchandise creditors.
4. Some of the bank loan was repaid during the year.
5. Operating expenses are composed of $9,500 of depreciation expense, $7,750 of administrative expenses, $50,000 of salaries expense, and an $11,000 impairment loss on goodwill.
Instructions
(a) Prepare the statement of cash flows, using either
(1) The indirect method or
(2) The direct method, as assigned by your instructor.
(b) Resolute's cash position more than doubled between 2014 and 2015. Identify the primary reason(s) for this significant increase?

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2015 2014 Assets 13,000 38,000 27,000 $ 5,000 Accounts receivable Merchandise inventory Property, plant, and equipment Accumulated depreciation 24,000 20,000 78,000 (24,000) 16,000 (30,000) 5,000 Total assets $133,000 $119,000 Liabilities and Shareholders' Equi $17,000 1,900 1,000 34,100 18,000 15,000 2,100 4,000 50,650 14,000 28,250 5,000 $119,000 Salaries payable Income tax payable Bank loan payable Accumulated other comprehensive income Total liabilities and shareholders' equity $133,000