The income statement and unclassified statement of financial position for Wildhorse, Inc. follow: WI

The income statement and unclassified statement of financial position for Wildhorse, Inc. follow: WILDHORSE, INC. Statement of Financial Position December 31 2017 Assets 2018 Cash $100,000 $48,500 Held for trading investments 120,000 114,500 Accounts receivable 42,700 76,000 Inventory 122,700 94,550 Prepaid expenses 19,000 27,800 316,000 Equipment 295,000 Accumulated depreciation (47,000) (53,900) $706,700 $569,150 Total assets Liabilities and Shareholders' Equity Accounts payable $93,500 $77,200 Accrued liabilities 7,100 12,000 Bank loan payable 131,200 185,850 Common shares 220,000 175,000 Retained earnings 250,000 124,000 $706,700 $569,150 Total liabilities and shareholders' equity Sales $536,000 Cost of goods sold 186,900 349,100 Gross profit Operating expenses 116,400 232,700 Income from operations Other revenues and expenses Unrealized gain on held for trading investments $5,500 (4,720) Interest expense 780 233,480 Income before income tax Income tax expense 45,000 $188,480 Net income Additional information: 1 Prepaid expenses and accrued liabilities relate to operating expenses. An unrealized gain on held for trading investments of $5,500 was recorded. 2. New equipment costing $81,000 was purchased for $21,400 cash and a $59,600 long-term bank loan payable. 4. Old equipment having an original cost of $60,000 was sold for $1,800. Accounts payable relate to merchandise creditors. 5. 6. Some of the bank loan was repaid during the year. 7 A dividend was paid during the year. 8 Operating expenses include $47,000 of depreciation expense and a $4,300 loss on disposal of equipment. (a) Prepare the statement of cash flows, using the indirect method. (Show amounts that decrease cash flow with either a (15,000).) sign e.g. -15,000 or in parenthesis e.g. WILDHORSE, INC. Statement of Cash Flows-Indirect Method Year Ended December 31, 2018 Adjustments to reconcile net income to to the Statement of Cash Flows: During the year, the company purchased equipment costing $ payable. Note by paying $21,400 cash and issuing a $59,600 bank loan