Comparative balance sheet accounts of Culver Inc. are presented below. CULVER INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,700 Accounts Receivable 71,000 60,300 Inventory 29,700 24,300 Equity investments 22,200 38,900 Machinery 30,000 18,900 Buildings 67,700 56,700 Land 7,600 7,600 $270,600 $240,400 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation-Machinery 5,700 2,300 Accumulated Depreciation-Buildings 13,700 9,000 Accounts Payable 35,300 24,700 Accrued Payables 3,400 2,600 Long-Term Notes Payable 20,900 30,800 Common Stock, no-par 150,000 125,000 Common Stock, no-par 150,000 125,000 Retained Earnings 39,400 44,500 $270,600 $240,400 Additional data (ignoring taxes): 1. Net income for the year was $41,100. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,300 were sold during the year for $29,100. No unrealized gains and losses were recorded 4. on these investments in 2017, 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Culver's 2017 income statement follows (ignoring taxes). Sales revenue $535,500 Less: Cost of goods sold 376,200 Gross margin 159,300 Less: Operating expenses (includes $8,850 depreciation and $5,318 bad debts) 121,200 Income from operations 38,100 Other: Gain on sale of investments $3,800 Loss on sale of machinery (800 ) 3,000 Net income $41,100 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) CULVER INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Gain on Sale of Investments Loss on Sale of Machinery Loss on Sale of Machinery Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accrued Payables Increase in Accounts Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Purchase of Investments Purchase of Machinery Addition to Buildings Sale of Investments Sale of Machinery Net Cash Used by Investing Activities Cash Flows from Financing Activities Reduction in Long-term Note Payable Cash Dividends Paid Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2017 Cash, December 31, 2017 Comparative balance sheet accounts of Culver Inc. are presented below. CULVER INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,700 Accounts Receivable 71,000 60,300 Inventory 29,700 24,300 Equity investments 22,200 38,900 Machinery 30,000 18,900 Buildings 67,700 56,700 Land 7,600 7,600 $270,600 $240,400 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation-Machinery 5,700 2,300 Accumulated Depreciation-Buildings 13,700 9,000 Accounts Payable 35,300 24,700 Accrued Payables 3,400 2,600 Long-Term Notes Payable 20,900 30,800 Common Stock, no-par 150,000 125,000 Common Stock, no-par 150,000 125,000 Retained Earnings 39,400 44,500 $270,600 $240,400 Additional data (ignoring taxes): 1. Net income for the year was $41,100. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,300 were sold during the year for $29,100. No unrealized gains and losses were recorded 4. on these investments in 2017, 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Culver's 2017 income statement follows (ignoring taxes). Sales revenue $535,500 Less: Cost of goods sold 376,200 Gross margin 159,300 Less: Operating expenses (includes $8,850 depreciation and $5,318 bad debts) 121,200 Income from operations 38,100 Other: Gain on sale of investments $3,800 Loss on sale of machinery (800 ) 3,000 Net income $41,100 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) CULVER INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Gain on Sale of Investments Loss on Sale of Machinery Loss on Sale of Machinery Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accrued Payables Increase in Accounts Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Purchase of Investments Purchase of Machinery Addition to Buildings Sale of Investments Sale of Machinery Net Cash Used by Investing Activities Cash Flows from Financing Activities Reduction in Long-term Note Payable Cash Dividends Paid Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2017 Cash, December 31, 2017 Comparative balance sheet accounts of Culver Inc. are presented below. CULVER INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,700 Accounts Receivable 71,000 60,300 Inventory 29,700 24,300 Equity investments 22,200 38,900 Machinery 30,000 18,900 Buildings 67,700 56,700 Land 7,600 7,600 $270,600 $240,400 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation-Machinery 5,700 2,300 Accumulated Depreciation-Buildings 13,700 9,000 Accounts Payable 35,300 24,700 Accrued Payables 3,400 2,600 Long-Term Notes Payable 20,900 30,800 Common Stock, no-par 150,000 125,000 Common Stock, no-par 150,000 125,000 Retained Earnings 39,400 44,500 $270,600 $240,400 Additional data (ignoring taxes): 1. Net income for the year was $41,100. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,300 were sold during the year for $29,100. No unrealized gains and losses were recorded 4. on these investments in 2017, 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Culver's 2017 income statement follows (ignoring taxes). Sales revenue $535,500 Less: Cost of goods sold 376,200 Gross margin 159,300 Less: Operating expenses (includes $8,850 depreciation and $5,318 bad debts) 121,200 Income from operations 38,100 Other: Gain on sale of investments $3,800 Loss on sale of machinery (800 ) 3,000 Net income $41,100 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) CULVER INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Gain on Sale of Investments Loss on Sale of Machinery Loss on Sale of Machinery Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accrued Payables Increase in Accounts Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Purchase of Investments Purchase of Machinery Addition to Buildings Sale of Investments Sale of Machinery Net Cash Used by Investing Activities Cash Flows from Financing Activities Reduction in Long-term Note Payable Cash Dividends Paid Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2017 Cash, December 31, 2017 Comparative balance sheet accounts of Culver Inc. are presented below. CULVER INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,700 Accounts Receivable 71,000 60,300 Inventory 29,700 24,300 Equity investments 22,200 38,900 Machinery 30,000 18,900 Buildings 67,700 56,700 Land 7,600 7,600 $270,600 $240,400 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation-Machinery 5,700 2,300 Accumulated Depreciation-Buildings 13,700 9,000 Accounts Payable 35,300 24,700 Accrued Payables 3,400 2,600 Long-Term Notes Payable 20,900 30,800 Common Stock, no-par 150,000 125,000 Common Stock, no-par 150,000 125,000 Retained Earnings 39,400 44,500 $270,600 $240,400 Additional data (ignoring taxes): 1. Net income for the year was $41,100. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,300 were sold during the year for $29,100. No unrealized gains and losses were recorded 4. on these investments in 2017, 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Culver's 2017 income statement follows (ignoring taxes). Sales revenue $535,500 Less: Cost of goods sold 376,200 Gross margin 159,300 Less: Operating expenses (includes $8,850 depreciation and $5,318 bad debts) 121,200 Income from operations 38,100 Other: Gain on sale of investments $3,800 Loss on sale of machinery (800 ) 3,000 Net income $41,100 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) CULVER INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Gain on Sale of Investments Loss on Sale of Machinery Loss on Sale of Machinery Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accrued Payables Increase in Accounts Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Purchase of Investments Purchase of Machinery Addition to Buildings Sale of Investments Sale of Machinery Net Cash Used by Investing Activities Cash Flows from Financing Activities Reduction in Long-term Note Payable Cash Dividends Paid Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2017 Cash, December 31, 2017