Comparative balance sheet accounts of Whispering Inc. are presented below. WHISPERING INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,500 Accounts Receivable 70,200 59,800 Inventory 29,700 24,100 Equity investments 22,500 38,100 Machinery 30,100 18,900 Buildings 67,000 55,700 Land 7,400 7,400 $269,300 $237,500 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,600 Accumulated DepreciationMachinery 5,600 2,200 Accumulated DepreciationBuildings 13,600 9,000 Accounts Payable 35,300 24,600 Accrued Payables 3,400 2,600 Long-Term Notes Payable 20,800 30,900 Common Stock, no-par 150,000 125,000 Retained Earnings 38,400 41,600 $269,300 $237,500 Additional data (ignoring taxes): 1. Net income for the year was $42,900. 2. Cash dividends declared and paid during the year were $21,100. 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 $25,100 were sold during the year for $28,800. 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. Whisperings 2017 income statement follows (ignoring taxes). Sales revenue $541,200 Less: Cost of goods sold 380,200 Gross margin 161,000 Less: Operating expenses (includes $8,750 depreciation and $5,835 bad debts) 121,000 Income from operations 40,000 Other: Gain on sale of investments $3,700 Loss on sale of machinery (800 ) 2,900 Net income $42,900

(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).) WHISPERING INC. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to $ $