Exercise 23-14

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

FLOUNDER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		12/31/17			12/31/16
Cash		$5,900			$7,000
Accounts receivable		61,500			51,400
Short-term debt investments (available-for-sale)		35,400			17,800
Inventory		39,900			60,400
Prepaid rent		4,900			3,900
Equipment		155,300			131,000
Accumulated depreciationequipment		(34,700	)		(25,200	)
Copyrights		45,900			49,900
Total assets		$314,100			$296,200
Accounts payable		$46,500			$39,600
Income taxes payable		4,100			5,900
Salaries and wages payable		8,100			4,100
Short-term loans payable		8,000			9,900
Long-term loans payable		60,600			68,600
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		56,800			38,100
Total liabilities & stockholders equity		$314,100			$296,200

FLOUNDER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue				$335,275
Cost of goods sold				173,900
Gross profit				161,375
Operating expenses				121,000
Operating income				40,375
Interest expense		$11,500
Gain on sale of equipment		2,000		9,500
Income before tax				30,875
Income tax expense				6,175
Net income				$24,700

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).)