a Statement of Cash Flows (Indirect Method) lpauow Company's income statement and companaive balance sheets follow y's income statement and comparative balance sheets follow LO3, 4, 5 RAINBOW COMPANY For Year Ended December 31, 2016 Dividend income. Total revenue Cost of goods sold. Wages and other operating expenses $750,000 765,000 $440,000 130,000 39,000 7,000 13,000 44,000 5,000 (3,000) aon expense. Patent amortization expense Interest expense Income tax expense Loss on sale of equipment Gain on sale of investments.. 875,000 $ 90,000 Net income RAINBOW COMPANY Balance Sheets Dec. 31, 2016 Dec. 31, 2015 Assets Cash and cash equivalents 19,000 40,000 103,000 10,000 .. $ 25,000 Inventory Prepaid expenses. Long-term investments Land Buildings 30,000 77,000 6,000 57,000 190,000 445,000 100,000 350,000 (75,000) 225,000 (46,000) 32,000 ..(91,000) 179,000 Accumulated depreclation-equipment Patents 42,000) 50,000 $781,000 Total assets. Liabilities and Stockholders' Equity Accounts payable. nterest payable Income tax payable Bonds payable Preferred stock ($100 par value) . . Common stock ($5 par value 20,000 $ 16,000 5,000 10,000 125,000 75,000 364,000 124,000 62,000 6,000 8,000 155,000 . 100,000 379,000 133,000 102,000 Retained earnings .. Total liabilities and equity.... $781,000 During 2016, the following transactions and events occurred 1. Sold long-term investments costing $57,000 for $60,000 cash. Purchased land for cash. 2. SCapitalized an expenditure made to improve the building