Chapter 4 Reporting and Analyzing Cash Flow! P4-46. Prepari Preparing a Statement of Cash Flows (Indirect Method) Wolff Company's income statement and comparative balance sheets follow. LO3, 4 WOLFF COMPANY Income Statement For Year Ended December 31, 2016 $635,000 Sales. ... Cost of goods sold... Wages expense. Insurance expense... Depreciation expense.. Interest expense... Income tax expense.. Net income.. $430,000 86,000 8,000 17,000 9,000 29,000 579,000 $ 56,000 WOLFF COMPANY Balance Sheets Dec. 31, 2016 Dec. 31, 2015 Assets Cash.... Accounts receivable.. Inventory......... Prepaid insurance. . Plant assets.. Accumulated depreciation Total assets... Liabilities and Stockholders' Equity Accounts payable. Wages payable.... Income tax payable .. Bonds payable ... Common stock... Retained earnings ... Total liabilities and equity. $ 11,000 41,000 90,000 5,000 250,000 (68,000) $329,000 $ 5,000 32,000 60,000 7,000 195,000 (51,000) $248,000 $7,000 9,000 7,000 130,000 90,000 86,000 $329,000 $ 10,000 6,000 8,000 75,000 90,000 59,000 $248,000 Cash dividends of $29,000 were declared and paid during 2016. Also in 2016, plant assets were purchased for cash, and bonds payable were issued for cash. Bond interest is paid semiannually on June 30 and December 31. Accounts payable relate to merchandise purchases. REQUIRED a. Compute the change in cash that occurred during 2016. Prepare a 2016 statement of cash flows using the indirect method. Compute and interpret Wolff's (1) operating cash flow to current liabilities ratio, and (2) operating cash flow to capital expenditures ratio. P4-47