Egner Supply Company is preparing its annual financial statements at December 31, 2016. The financial statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized (meaning not in proper classified format) as follows: Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation 2016 $ 33,000 32,000 32,000 111,000 (30,000) $ 178,000 2015 28,000 30,000 34,000 98,000 (25,000) 165,000 Accounts Payable Wages Payable Notes payable, long-term Common Stock & APIC Retained Earnings $ 34,000 2,500 40,000 73,000 28,500 $ 178,000 27,000 4,500 46,000 63,000 24,500 165,000 Income Statement for 2016 Sales Cost of goods sold Wage expense Depreciation expense Other expenses Income tax expense Net Income $ 144,000 94,000 21,000 5,000 8,000 4,000 $ 12,000 Additional Data: a. The company bought equipment for $13,000 cash. b. The company paid $6,000 on the long-term note payable. c. The company issued new shares of stock for $10,000 cash. Required: 1. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2016. 2. Evaluate the statement of cash flows. 3. Calculate the quality of income ratio and interpret the results - (the company's prior year ratio was 1.12)