Exercise 23-14 Headland Inc., a greeting card company, had the following statements prepared as of December 31, 2017. HEADLAND INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,100 $6,900 Accounts receivable 61,900 50,600 Short-term debt investments (available-for-sale) 34,700 18,100 Inventory 40,000 59,400 Prepaid rent 5,000 4,000 Equipment 152,800 128,900 Accumulated depreciation-equipment (34,900) (25,100) Copyrights 46,100 50,400 Total assets $311,700 $293,200 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 $45,800 3,900 8,100 8,100 59,900 100,000 30,000 55,900 $311,700 $40,100 6,000 4,000 10,100 69,400 100,000 30,000 33,600 $293,200 HEADLAND INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,200 Gain on sale of equipment 2,000 Income before tax Income tax expense Net income $339,275 174,600 164,675 120,100 44,575 9,200 35,375 7,075 $28,300 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 $20,100 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).) HEADLAND INC. Statement of Cash Flows