Comparative balance sheet accounts of Buffalo Inc. are presented below. BUFFALO INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,200 $33,400 Accounts Receivable 70,100 59,900 Inventory 30,000 24,300 Equity investments 22,400 38,200 Machinery 29,800 18,800 Buildings 67,200 56,300 Land 7,500 7,500 $269,200 $238,400 Credit Accounts Allowance for Doubtful Accounts $2,300 $1,600 Accumulated DepreciationMachinery 5,700 2,200 Accumulated DepreciationBuildings 13,300 9,000 Accounts Payable 34,700 24,700 Accrued Payables 3,300 2,600 Long-Term Notes Payable 21,100 30,900 Common Stock, no-par 150,000 125,000 Retained Earnings 38,800 42,400 $269,200 $238,400 Additional data (ignoring taxes): 1. Net income for the year was $42,700. 2. Cash dividends declared and paid during the year were $21,300. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. Equity investments (level of ownership is less than 20%) that cost $24,800 were sold during the year for $28,500. No unrealized gains and losses were recorded on these investments in 2017. 5. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250. Buffalos 2017 income statement follows (ignoring taxes). Sales revenue $539,300 Less: Cost of goods sold 378,300 Gross margin 161,000 Less: Operating expenses (includes $8,550 depreciation and $5,926 bad debts) 121,200 Income from operations 39,800 Other: Gain on sale of investments $3,700 Loss on sale of machinery (800 ) 2,900 Net income $42,700 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities $ (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) BUFFALO INC. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to $ $