(L02,4) (SCF—Indirect Method) The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017.

Comparative Balance Sheets Increase 2017 2016 (Decrease)
Cash $ 815,000 $ 700,000 $115,000 Accounts receivable 1,128,000 1,168,000 (40,000)
Inventory 1,850,000 1,715,000 135,000 Property, plant, and equipment 3,307,000 2,967,000 340,000 Accumulated depreciation (1,165,000) (1,040,000) (125,000)
Investment in Myers Co. 310,000 275,000 35,000 Loan receivable 250,000 — 250,000 Total assets $6,495,000 $5,785,000 $710,000 2017 2016 (Decrease)
Accounts payable $1,015,000 $ 955,000 $ 60,000 Income taxes payable 30,000 50,000 (20,000)
Dividends payable 80,000 100,000 (20,000)
Lease liability 400,000 — 400,000 Common stock, $1 par 500,000 500,000 —
Paid-in capital in excess of par—common stock 1,500,000 1,500,000 —
Retained earnings 2,970,000 2,680,000 290,000 Total liabilities and stockholders’ equity $6,495,000 $5,785,000 $710,000 Additional information:
1. On December 31, 2016, Sullivan acquired 25% of Myers Co.’s common stock for $275,000. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2017. No dividend was paid on Myers’s common stock during the year.
2. During 2017, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2017.
3. On January 2, 2017, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash.
4. On December 31, 2017, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2018.
5. Net income for 2017 was $370,000.
6. Sullivan declared and paid the following cash dividends for 2017 and 2016.
2017 2016 Declared December 15, 2017 December 15, 2016 Paid February 28, 2018 February 28, 2017 Amount $80,000 $100,000 Instructions Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2017, using the indirect method.