Comparative balance sheet accounts of Sage Inc. are presented below. SAGE INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,300 $34,000 Accounts Receivable 70,600 59,600 Inventory 30,000 23,900 Equity investments 22,500 38,700 Machinery 29,700 18,600 Buildings 67,900 56,600 Land 7,500 7,500 $270,500 $238,900 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated DepreciationMachinery 5,700 2,300 Accumulated DepreciationBuildings 13,600 8,900 Accounts Payable 34,800 24,500 Accrued Payables 3,300 2,700 Long-Term Notes Payable 21,200 31,200 Common Stock, no-par 150,000 125,000 Retained Earnings 39,700 42,800 $270,500 $238,900 Additional data (ignoring taxes): 1. Net income for the year was $43,100. 2. Cash dividends declared and paid during the year were $21,200. 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 $25,000 were sold during the year for $28,700. No unrealized gains and losses were recorded on these investments in 2017. 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Sages 2017 income statement follows (ignoring taxes). Sales revenue $544,200 Less: Cost of goods sold 383,000 Gross margin 161,200 Less: Operating expenses (includes $8,850 depreciation and $5,733 bad debts) 121,000 Income from operations 40,200 Other: Gain on sale of investments $3,700 Loss on sale of machinery (800 ) 2,900 Net income $43,100 (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.

RCES AS OF DECEMBER 31, 2017 AND 2016 December 31 ER Debit Accounts 2017 2016 Cash Accounts Receivable Inventory Equity investments Machinery Buildings Land $42,300 70,600 30,000 22,500 29,700 67,900 7,500 $270,500 $34,000 59,600 23,900 38,700 18,600 56,600 7,500 $238,900 ce ce $1,500 Study $2,200 5,700 13,600 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings 34,800 3,300 21,200 150,000 39,700 $270,500 2,300 8,900 24,500 2,700 31,200 125,000 42,800 $238,900 Additional data (ignoring taxes): 1. Net income for the year was $43,100. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings 4. Equity investments (level of ownership is less than 20%) that cost $25,000 were sc 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was s Sage's 2017 Income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,850 depreciation and $5.733 had date 39.700 $270,500 125.000 42.800 $239,900 Additional data (ignoring taxes): 1. Net Income for the year was $43,100. 2. Cash dividends declared and paid during the year were $21,200. 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 2096) that cost $25,000 were sold during the year for $28.700. No unrealized gains and losses were recorded on these investment 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated. was sold for $2.150. $544.200 383.000 Sage's 2017 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8.850 depreciation and $5,733 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net Income 161,200 121,000 40.200 $3,700 (800) 2,900 $43,00 (a) Compute net cash flow from operating activities using the direct method. (Enternative amounts using either a negative sin receding the number.. -15 or protheses (451) Net cash flow from operating activities $ (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decree cash flow with either a sione. 15.000 or in parenthesis. (15.000) SAGE INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to to search E Oo hp