Exercise 23-14 Indigo Inc., a greeting card company, had the following statements prepared as of December 31, 2017. INDIGO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,000 $6,900 Accounts receivable 62,500 50,900 Short-term debt investments (available-for-sale) 35,200 17,900 40,30059,500 Inventory 4,900 4,100 Prepaid rent 153,100129,600 Equipment (35,200) (24,700) Accumulated depreciation-equipment 45,600 50,500 Copyrights $312,400 $294,700 Total assets $45,500 $40,000 Accounts payable 4,0006,100 Income taxes payable 3.900 8,000 Salaries and wages payable 9,900 8,000 Short-term loans payable 59,40068,800 Long-term loans payable 100,000 100,000 Common stock, $10 par 30,00030,000 Contributed capital, common stock 57,50036,000 Retained earnings $312,400 $294,700 Total liabilities & stockholders equity $312,400 $294,700 E oiders equity INDIGO INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue $337,300 Cost of goods sold 174,000 Gross profit 163,300 Operating expenses 119,100 Operating income 44,200 Interest expense $11,600 Gain on sale of equipment 1,900 9,700 Income before tax 34,500 6,900 Income tax expense $27,600 Net income Additional information: 1. Dividends in the amount of $6,100 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 $20,000 and was 70% depreciated was sold during 2017. Prepare a statement of cash flows using the indirect method. (show amounts that decrease cas INDIGO INC Statement of Cash Flows For the Year Ended Decem Cash Flows from Operatin Net Income Adjustments to reconcile net income to Net Cash Provided by Ope Depreciation Expense Amortization of Copyvright ain on Sale of Equipmen Decrease in Inventories Encrease in salaries and Increase in Accounts Paya ncrease in Prepaid Rent Increase in Accounts Rece Decrease in Income Taxes Increase TnP ncrease in Accounts Re Decrease in Income Taxes Net Cash Provided by Ope Cash Flows from Investing Sale of Equipment Purchase of Equipment Purchase of Investments Net Cash Used by Investirl Cash Flows from Financing Principal Payment on Shor Principal Payment on Lond ividend Payments et Decrease in Cash ash at Beginning of Peri Cash at End of Period