Exercise 2 OLIVANDER CORP. BALANCE SHEET AS AT DECEMBER 31, 2017 2017 2016 Change Assets Cash $ 10,000 $ 4,000 $ 6,000 Account Receivable $ 20,500 $ 12,950 $ 7,550 Short-term investments (Debt Securities - AFS) $ 22,000 $ 30,000 $ (8,000) Inventory $ 42,000 $ 35,000 $ 7,000 Prepaid rent $ 3,000 $ 12,000 $ (9,000) Prepaid insurance $ 2,100 $ 900 $ 1,200 Supplies $ 1,000 $ 750 $ 250 Land $ 125,000 $ 175,000 $ (50,000) Buildings $ 350,000 $ 350,000 $ Accumulated depreciation-buildings $ (105,000) $ (87,500) Equipment $ 525,000 $ 400,000 $ (17,500) $125,000 Accumulated depreciation-equipment $ (130,000) $ (112,000) $ (18,000) Patents $ 45,000 $ 50,000 $ (5,000) Total assets $ 910,600 $ 871,100 $ 39,500 Liabilities and Shareholders' Equity Accounts payable $ 22,000 $ 32,000 $ (10,000) Income taxes payable $ 5,000 $ 4,000 $ 1,000 Salaries and wages payable $ 5,000 $ 3,000 $ 2,000 Short-term notes payable $ 10,000 $ 10,000 $ - Long-term notes payable $ 60,000 $ 70,000 $ (10,000) Bonds payable $ 400,000 $ 400,000 $ Premium on bonds payable $ 20,303 $ 25,853 $ (5,550) Common stock $ 240,000 $ 220,000 $ 20,000 Paid-in capital in excess of par-common stock $ 25,000 $ 17,500 $ 7,500 Retained earnings $ 123,297 $ 88,747 $ 34,550 Total liabilities and stockholders' equity $ 910,600 $ 871,100 $ 39,500 OLIVANDER CORP. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales Revenue COGS $ 1,160,000 $ 748,000 Gross Profit Operating expenses Selling expenses Rent expense Insurance expense Salary expense $ 412,000 $ 79,200 $ 9,000 $ 1,000 $ 4,000 Supplies expense $ 500 Other expense $ 142,200 Depreciation/Amortization Exepnse $ 40,500 Operating income $ 135,600 Other revenues and expenses Gain on sale of land $ 8,000 Gain on sale of short term investment $ 4,000 Dividend Revenue $ 2,400 Interest Exepense $ 51,750 Income before tax expense $ 98,250 Tax expense $ 39,400 $ 58,850 Income Required [Show all the calculation to receive full points]: 1. Prepare a complete statement of cash flow (use direct method for operating cash flow)