Exercise 23-14

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

SPLISH INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		12/31/17			12/31/16
Cash		$5,900			$6,900
Accounts receivable		61,400			51,200
Short-term debt investments (available-for-sale)		34,700			18,000
Inventory		40,200			59,700
Prepaid rent		5,000			4,100
Equipment		152,700			130,200
Accumulated depreciationequipment		(35,400	)		(25,000	)
Copyrights		45,700			49,900
Total assets		$310,200			$295,000
Accounts payable		$46,300			$40,400
Income taxes payable		3,900			6,000
Salaries and wages payable		8,100			3,900
Short-term loans payable		8,100			10,100
Long-term loans payable		60,200			69,400
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		53,600			35,200
Total liabilities & stockholders equity		$310,200			$295,000

SPLISH INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue				$335,075
Cost of goods sold				175,200
Gross profit				159,875
Operating expenses				120,100
Operating income				39,775
Interest expense		$11,400
Gain on sale of equipment		2,000		9,400
Income before tax				30,375
Income tax expense				6,075
Net income				$24,300

Additional information:

1.		Dividends in the amount of $5,900 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).)