Question Two (18 points) Use the information below to prepare the statement of cash flows using the direct method. JABAL AL-SHAIKH COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2021 Cash Accounts receivable 2021 2020 $2,500 $4,000 Short-term investments (Available-for-sale) Inventories Prepaid insurance Ski equipment Accumulated depreciation-equipment Patents 103,000 97,000 96,000 121,000 91,000 54,000 4,000 6,000 89,000 43,000 -23,500 -18,000 Total assets 79,000 83,000 Accounts payable $441,000 $390,000 Income taxes payable 92,200 75,000 21,800 15,700 Wages payable 4,000 9,000 Short-term loans payable to bank 23,500 0 Long-term loans payable 75,000 125,000 Common stock, $1 par 100,000 100,000 Additional paid-in capital 20,000 20,000 Retained earnings 104,500 45,300 Total liabilities & stockholders' equity $441,000 $390,000 JABAL AL-SHAIKH INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2021 $540,200 Sales 302,000 Cost of goods sold $238,200. Gross margin 94,000 Operating expenses $144,200 Operating income 20,500 Interest expense 4,000 24,500 Loss on sale of equipment $119,700 Income before income tax 40.500 Income tax expense $79,200 Net income Additional information: 1. Depreciation expense and amortization expense are included in operating expenses. 2. Equipment that had a cost of $25,000 and was 20% depreciated was sold during 2021. 3. Cash dividends totaling $20,000 were paid. 3