LARKSPUR COMPANY AS OFDECEMBER 31 2017 COMPARATIVE BALANCE SHEET ACCOUNTS ebit Balanc 2016 $70,600 $50,500 155,900 130,000 75,700 61,300 54,800 84,100 69,500 48,200 146,400 146,400 39,800 25,300 $612,700 $545,800 as Accounts Receivable Inventory Debt investments (available-for-sale) Equipment Buildings Land Totals Credit Balances Allowance for Doubtful Accounts $9,900 $8,000 cumulated Depreciation 21,200 14,000 Ac -Equipment Accumulated Depreciation 37,30o 28,300 -Buildings Accounts Payable Income Taxes Payable Long-Term Notes Payable Common Stock Retained Earnings 66,100 60,200 11,900 10,000 62,000 70,000 310,000 260,000 94,300 95,300 $612,700 $545,800 Totals Additional data 1. Equipment that cost $9,900 and was 60% depreciated was sold in 2017 2. Cash dividends were declared and paid during the year 3. Common stock was issued in exchange for land 4. Investments that cost $35,200 were sold during the year 5. There were no write-offs of uncollectible accounts during the year Larkspur's 2017 income statement is as follows $946,700 595,100 351,600 249,600 102,000 Sales revenue Less: Cost of goods sold Gross profit Less: Operating expenses (includes depreciation expense and bad debt expense) Income from operations Other revenues and expenses Gain on sale of investments $15,000 Loss on sale of equipment (3,000) 12,000 114,000 44,900 Income before taxes Income taxes Additional data: 1. Equipment that cost $9,900 and was 60% depreciated was sold in 2017 2. Cash dividends were declared and paid during the year 3. Common stock was issued in exchange for land. 4. Investments that cost $35,200 were sold during the year. 5. There were no write-offs of uncollectible accounts during the year. Larkspur's 2017 income statement is as follows. $946,700 595,100 351,600 249,600 102,000 Sales revenue Less: Cost of goods sold Gross profit Less: Operating expenses (includes depreciation expense and bad debt expense) Income from operations Other revenues and expenses Gain on sale of investments $15,000 (3,000 12,000 114,000 44,900 $69,100 Loss on sale of equipment Income before taxes Income taxes Net income (a) Compute net cash provided by operating activities under the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities48640 (b) 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).) LARKSPUR COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities 69,1 Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities 221-40 Depreciation Expense Loss on Sale of Equipment Gain on Sale of Investments Increase in Accounts Receivable (Net) Increase in Inventory 3,000 (15,000) (25900) (14,400) Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accounts Payable Increase in Income Taxes Payable (25900) (14,400) 5,900 1,900 (22,360) Net Cash Provided by Operating Activities 46,740 Net Cash Used by Investing Activities Sale of Equipment 960 Sale of Investments 50,200 Purchase of Equipment 21300 (5,900) Purchase of Investments 23,960 Net Cash Provided by Investing Activities Net Cash Used by Financing Activities Cash Dividends Paid (70,600) (8,000) 35,000 Payment of Long-term Notes Payable ssuance of Common Stock (43,600) Net Cash Used by Financing Activities Cash Flows from Operating Activities Cash, January 1, 2017 Cash, December 31, 2017 20,100 50,500 70,600 Noncash Investing and Financing Activities 35500 Issuance of Common Stock for Land