Exercise 23-14

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

SAGE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		12/31/17			12/31/16
Cash		$6,100			$7,000
Accounts receivable		61,600			51,500
Short-term debt investments (available-for-sale)		34,900			18,100
Inventory		39,900			60,400
Prepaid rent		5,000			4,100
Equipment		154,100			130,300
Accumulated depreciationequipment		(35,000	)		(24,900	)
Copyrights		45,500			50,500
Total assets		$312,100			$297,000
Accounts payable		$45,800			$39,900
Income taxes payable		4,000			6,000
Salaries and wages payable		8,100			4,000
Short-term loans payable		7,900			10,000
Long-term loans payable		60,500			69,300
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		55,800			37,800
Total liabilities & stockholders equity		$312,100			$297,000

SAGE INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue				$333,000
Cost of goods sold				174,000
Gross profit				159,000
Operating expenses				119,500
Operating income				39,500
Interest expense		$11,500
Gain on sale of equipment		2,000		9,500
Income before tax				30,000
Income tax expense				6,000
Net income				$24,000

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).)