Complete the statement of Cash Flows using the INDIRECT method

Comparative balance sheets for 2016 and 2015 and an income statement for 2016 are provided below for B2B Industries. Additional information from the accounting records of B2B also is provided.

B2B Industries

Comparative Balance Sheets

December 31, 2016 and 2015 ($ in 000)

2016 2015

Cash $ 1,800 $ 1,125

Accounts receivable 1,800 1,350

Inventory 2,700 1,575

Land 2,025 1,800

Building 2,700 2,700

Accumulated depreciation - building 900 810

Equipment 8,550 6,750

Accumulated depreciation - equipment 1,575 1,440

Patent 3,600 4,500

2016 2015

Accounts payable $ 2,250 $ 1,350

Accrued expenses payable 900 675

Lease liability land 450 0

Common stock 9,450 9,000

Paid-in capitalexcess of par 2,250 2,025

Retained earnings 5,300 4,500

B2B Industries

Income Statement Post-Closing Accounts

For year ended December 31, 2016 ($ in 000)

Sales revenue $7,935

Gain on sale of land 270

Cost of goods sold 1,800

Depreciation expense-building 50

Depreciation expense-equipment 945

Loss on sale of equipment 45

Amortization of patent 900

Operating expenses 1,500

Additional information form the accounting records are below. All transactions are material in amount.

It was discovered that the 2016 depreciation expense for the building was understated by $40,000 due to a mathematical error.

The Statement of Shareholders' Equity reveals reductions of $675,000 and $1,350,000 for stock dividends and cash dividends, respectively.

The common stock represents 1 million shares of $10 par stock authorized, 945,000 shares issued and outstanding.

The patent, granted by the U.S. Patent Office, expires December 31, 2020.

Accrued expenses payable are wages and payroll taxes that will be paid by the end of March 2017.

The land lease is considered a capital lease, as the land will transfer title ownership to B2B at the end of the 10-year term. The lease calls for B2B to make annual payments of $50,000 due at the beginning of each year. On January 1, 2016, the estimated value of the land was $500,000. {Assume that the $450,000 is the correct present value for the lease liability on December 31, 2016} Hint: Note disclosure is needed. The current borrowing interest rate is 10%.

During 2016, equipment with an original cost of $900,000 (90% depreciated) was sold.