Main Street Antiques Ltd.'s comparative balance sheet at December 31, 2017, and its 2017 income statement are as follows:

Other information for the year ended December 31, 2017:
a. Acquired equipment by issuing a long-term note payable, $76,500, and paying $5,000 cash.
b. Purchased a long-term investment for cash.
c. Received cash for issuance of common shares, $40,000.
d. Only cash dividends were issued during the year.
e. Paid short-term note payable by issuing common shares.
Required
1. Prepare the cash flow statement of Main Street Antiques Ltd. for the year ended December 31, 2017, using the direct method to report operating activities. Also prepare a note to the financial statements providing a summary of non-cash investing and financing activities. All current accounts, except short-term notes payable, result from operating transactions.
2. Prepare a supplementary schedule showing cash flows from operations by the indirect method.

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MAIN STREET ANTIQUES LTD Balance Sheet December 31,2017 and 2016 2017 2016 Current assets Cash Accounts receivable Interest receivable Inventories Prepaid expenses s 188,000 370,000 14,500 343,000 18,500 50,500 422,500 212,000 $1,619,000 $ 43,000 241,500 18,000 301,000 14,000 26,000 368,000 480,000 $1,491,500 Long-term investment Plant and equipment, net Land Current liabilities Notes payable, short-term Accounts pavable Income tax payable Accrued liabilities Interest payable Salaries payable $ 67,000 234,500 69,000 41,000 18,500 4,500 237,000 319,500 628,000 $1,619,000 $ 90,500 201,500 72,500 48,500 14,500 13,000 470,500 256,000 324,500 $1,491,500 Long-term note payable Common shares Retained earnings MAIN STREET ANTIQUES LTD Income Statement For the Year Ended December 31, 2017 Net sales Cost of goods sold Gross margin Operating expenses: $1,327,000 402,000 925,000 Salaries expense Amortization expense Other expenses $194,000 27,000 210,000 431,000 494,000 Operating income MAIN STREET ANTIQUES LTD. Income Statement For the Year Ended December 31, 2017 Other revenues and expenses: Revenues and gains: Interest revenue Expenses and losses: Interest expense 53,000 (30,500) (33,500) Loss on sale of land Income before income taxes Income tax expense Net income (64,000) 483,000 49,500 $433,500