Prepare CFO under the DIRECT method using the data set of problem (a) P4-48 (12 marks) Classify interest income as CFO

P4-48 STATEMENT OF CASH FLOWS (INDIRECT METHOD) ARCTIC COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Net Cash Flow from Operating Activities Net Loss. $ (42,000) Add (Deduct) Items to Convert Net Loss to Cash Basis Depreciation. 22,000 Gain on Sale of Land. (25,000) Accounts Receivable Decrease. 8,000 Inventory Decrease. 6,000 Prepaid Advertising Decrease 3,000 Accounts Payable Decrease. (14,000) Interest Payable Increase. 6.000 Net Cash Used by Operating Activities, $ (36,000) Cash Flows from Investing Activities Sale of Land. 70,000 Purchase of Equipment (183,000)# Net Cash Used by Investing Activities. (113,000) Cash Flows from Financing Activities Issuance of Bonds Payable. 200,000 Purchase of Treasury Shares, (30,000) Net Cash Provided by Financing Activities, 170,000 Net Increase in Cash. 21,000 Cash at Beginning of Year 28,000 Cash at End of Year. $ 49,000 * The sum of the increase in PPE assets account ($138,000) and the book value of the land sold ($45,000).P4-48. Preparing a Statement of Cash Flows (Indirect Method) Arctic Company's income statement and comparative balance sheets follow. ARCTIC COMPANY Income Statement For Year Ended December 31, 2013 Sales . . . . . $728,000 Cost of goods sold . . . $534,000 Wages expense. . . 190,000 Advertising expense . . . . 31,000 Depreciation expense . . . 22,000 Interest expense . . . . 18,000 Gain on sale of land. . . . (25,000) 770,000 Net loss . . . $ (42,000)