5. (7 points) Geographica Inc., a greeting card company, had the following statements prepared as of December 31, 2017. GEOGRAPHICA INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,100 $6,900 Accounts receivable 61,900 50,500 Short-term debt investments (available-for-sale) 34,800 18,200 Inventory 39,900 59,800 Prepaid rent 4,900 4,000 Equipment 155,500 131,200 Accumulated depreciation- equipment (34,800) (25,300) Copyrights 45,700 50,200 Total assets $314,000 $295,500 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,200 4,000 7,900 7,900 59,800 100,000 30,000 58,200 $314,000 $39,700 6,100 4,000 10,000 68,600 100,000 30,000 37,100 $295,500 GEOGRAPHICA INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue $335,575 Cost of goods sold 173,200 Gross profit 162,375 Operating expenses 119, 100 Operating income 43,275 $11,400 2,000 Interest expense Gain on sale of equipment Income before tax Income tax expense Net income .9,400 33,875 6,775 $27,100 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,100 and was 70% depreciated was sold durina 2017. $11,400 2,000 9,400 Interest expense Gain on sale of equipment Income before tax Income tax expense Net Income 33,875 6,775 $27,100 Additional information 1. Dividends in the amount of $6,000 were declared and paid during 2017. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017 Prepare a statement of cash flows using the indirect method