The comparative statement of financial position for Dagenais Retailers Ltd. follows:

Additional information:
1. Net income was $32,000 in 2018.
2. Depreciation expense was $19,000 in 2018.
3. In 2018, no new bank loans were received.
4. In 2018, no furniture was purchased, but some furniture was sold for $6,000, which resulted in a gain on this disposal of $2,000.
5. No common shares were issued during the year but some were reacquired at the cost at which they were originally issued.
6. In 2018, dividends were declared and paid.
Instructions
(a) Prepare a statement of cash flows using the indirect method for 2018.
(b) Assess the strength of the company's cash flows for that year.

Transcribed Image Text:

DAGENAIS RETAILERS LTD Statement of Financial Position December 31 2018 2017 Assets Cash Accounts receivable Inventory Furniture Accumulated depreciation Total assets $ -0-$ 18,0oo 77,000 50,000 219,000168,0oo 130,000 163,0o0 (35,000) (45.000) $391,000 $354,000 1a Accounts overdraft Accounts payable Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders' equity ies $ 10,000 $ 68,00o $ 45,000 90,000 103,000 50,00060,0oo 173,000146,0oo $354,000 $391,000