(L02,4) EXCEL GROUPWORK (SCF—Indirect Method) The comparative balance sheets for Hinckley Corporation show the following information.

December 31 2017 2016 Cash $ 33,500 $13,000 Accounts receivable 12,250 10,000 Inventory 12,000 9,000 Available-for-sale debt investments –0– 3,000 Buildings –0– 29,750 Equipment 45,000 20,000 Patents 5,000 6,250 $107,750 $91,000 Allowance for doubtful accounts $ 3,000 $ 4,500 Accumulated depreciation—equipment 2,000 4,500 Accumulated depreciation—building –0– 6,000 Accounts payable 5,000 3,000 Dividends payable –0– 5,000 Notes payable, short-term (nontrade) 3,000 4,000 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings 20,750 6,000 $107,750 $91,000 Additional data related to 2017 are as follows.
1. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.
2. $10,000 of the long-term note payable was paid by issuing common stock.

3. Cash dividends paid were $5,000.
4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,000 (net of $2,000 taxes).
5. Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past.
6. Cash was paid for the acquisition of equipment.
7. A long-term note for $16,000 was issued for the acquisition of equipment.
8. Interest of $2,000 and income taxes of $6,500 were paid in cash.
Instructions Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country.