BRECKER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash 6,0007 7,0000 Gain on sale of equipment 12.000 19.400 Income before tax 0183,750 Income tax expense 0106,750 Net income $127,000 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 $20,000 and was 70%% depreciated was sold during 2017. Instructions Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.) Change in Estimate and Error; Financial Statements) (LO 2, 3) Presented below are the comparative income and retained earnings statements for Denise HE years 2017 and 2018. 2018 2017 Sales $340,0000 $270,0000 Cost of sales [200,0007 142,0000 Gross profit 140,0000 128,0000 Expenses 138,0000 50,0000 Net income $162,0000 $178,0000 Retained earnings (Jan. 1) $125,0007 $1/2,0000 Net income 52,0000 78,0000 Dividends (30,000) 1(25,000) Retained earnings (Dec. 31) $147,0000 $125,0000 The following additional information is provided: 1.In 2018, Denise Habbe Inc. decided to switch its depreciation method from sum-of-the-yea straight-line method. The assets were purchased at the beginning of 2017 for $100,000 with an es life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense o