Exercise 23-14

Culver Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

Additional information:

1.		Dividends in the amount of $6,000 were declared and paid during 2017.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2017.

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).)

CULVER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 $6,900 51,000 Cash $6,100 62,500 Accounts receivable Short-term debt investments (available-for-sale 34,800 18,100 Inventory Prepaid rent 39,600 60,200 4,000 154,500 130,100 4,900 Equipment Accumulated depreciation-equipment Copyrights Total assets (34,800) (25,300) 46,300 50,400 5313,900 $295,400 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,000 $40,200 6,000 4,000 10,000 69,000 100,000 100,000 30,000 36,200 5313,900 $295,400 4,000 8,100 8,000 59,700 30,000 58,100 CULVER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income $339,075 175,000 164,075 119,900 44,175 $11,300 2,000 9,300 34,875 6,975 $27,900 CULVER INC. Statement of Cash Flows Adjustments to reconcile net income to