HW Ch 23. Taylor Inc, a retail firm, had the following available. $338,150 202,890 135,260 Change 2,000 (10,000) 7,000 1,500 (700) 15,000 6,000 (4,000) 16,800 (2,300) 250 (4,600) 5,000 COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash 9000 7,000 Accounts receivable 41,000 51,000 Equity investments (at fair value) 25,000 18,000 Inventory 40,000 38,500 Prepaid rent 15,000 15,700 Equipment 145,000 130,000 Accumulated depr.-equipment (19,000) (25,000) Copyrights 46,000 50,000 Total assets 302,000 285,200 Accounts payable 46,000 48,300 Income taxes payable 6,250 6,000 Salaries and wages payable 8,000 12,600 Short-term loans payable 15,000 10,000 Long-term loans payable 60,000 60,000 Common stock, $10 par 80,590 73,300 Additional PIC: Common Stock 33,000 30,000 Retained earnings 53,160 45,000 Total liab and SE $302,000 $285,200 INCOME STATEMENT FOR THE YEAR ENDING 12/31/2017 Sales Cost of goods sold Gross margin Operating expenses: Depreciation expense (equipment) Amortization expense (copyrights) Other operating expenses Operating income Interest expense Gain (loss) on sale of equip. Unrealized gains (losses), investments Income before tax Income tax expense Net income 26,000 4,000 84.500 114,500 20,760 (2.100) (3.000) 7,000 22,660 (5,000) 17,660 7,290 3,000 8,160 16,800 Additional information: All depreciation expense and amortization expense are shown in the income statement. There were no purchases or sales of Equity Investments during the year. Equipment that had a cost of $40,000 was sold during 2017. Requirement 1: Using the direct method, prepare all three sections of the Statement of Cash Flows with supporting schedules and supporting calculations. Use the format provided. Requirement 2: Using the indirect method, prepare the scheule for Operating Cash Flows only. REQUIREMENT #2 Cash flows from operating activities: Indirect Method For the Year Ended December 31, 2017 Net income 17,660 Adjustments to reconcile net income to net cash provided by operating activities: Net cash provided by operating activities