Balance Sheets As of December 31 2017 2016 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation, Equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity $25,233 2,040 6,218 15,698 (7,841) 16,954 $58,302 $ 2,984 1,224 5,829 40,098 (18,193) 10,444 $ 42,386 $ 2,486 2,858 21,400 31,558 $58,302 $ 4,016 6,533 10,500 21,337 $ 42,386 Income Statement For the Year Ended December 31, 2017 Sales revenue $ 39,600 Cost of goods sold (15,696) Gross margin 23,904 Depreciation expense (3,822) Operating income 20,082 Gain on sale of equipment 450 Loss on disposal of land Net income $ 20,442 (90) Additional Data 1. During 2017, the company sold equipment for $18,176; it had originally cost $31,900. Accumulated depreciation on this equipment was $14,174 at the time of the sale. Also, the company purchased equipment for $7,500 cash. 2. The company sold land that had cost $4,390. This land was sold for $4,300, resulting in the recognition of a $90 loss. Also, common stock was issued in exchange for title to land that was valued at $10,900 at the time of exchange. 3. Paid dividends of $10,221. Required Prepare a statement of cash flows using the indirect method. (Amounts to be deducted and cash outflows should be indicated by a minus sign.) FANNING COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities: Net income Less: Increase/Decrease in current assets and current liabilities: Increase in accounts payable Decrease in inventory 816 389 1,530 Increase in inventory 3,822 90|| Plus: Noncash charges | Depreciation expense Less: Loss on disposal of land Plus: Gain on sale of equipment Net cash inflow from operating activities Cash flows from investing activities: Proceeds from sale of land Paid to purchase equipment Proceeds from sale of equipment $ 4,300 7,500 18,176 29,976 Net cash inflow from investing activities Cash flows from financing activities: 36,623 $ 35,623 Ending cash balance Schedule of noncash investing and financing activities