Learning Objective 2 P16-41B Preparing the statement of cash flows-indirect method with non-cash transactions The 2018 income statement and comparative balance sheet of Sweet Valley, Inc. follow: 1. Net Cash Prov. by Op. Act. $136,300 $ 445,000 203,200 241,800 SWEET VALLEY, INC. Income Statement Year Ended December 31, 2018 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense $ 77,400 Depreciation Expense-Plant Assets 14,500 Other Operating Expenses 10,100 Total Operating Expenses Operating Income Other Income and (Expenses): Interest Revenue 8,200 Interest Expense (21,100) Total Other Income and (Expenses) Net Income Before Income Taxes Income Tax Expense Net Income 102,000 139,800 (12,900) 126,900 19,400 $ 107,500 SWEET VALLEY, INC. Comparative Balance Sheet December 31, 2018 and 2017 2018 Assets 2017 Current Assets Cash $ 26,300 26.400 79,300 $ 15,400 25,100 91,300 Accounts Receivable Merchandise Inventory Long-term Assets Land Plant Assets Accumulated Depreciation-Plant Assets Total Assets 34.900 115,790 (19,890) 5 262,800 14,000 108,330 (18,630) $ 235,500 Liabilities $ 35,600 28.900 $ 30,100 30,800 Current Liabilities: Accounts Payable Accrued Liabilities Long-term Liabilities: Notes Payable Total Liabilities 78,000 142.500 105,000 165,900 Stockholders' Equity Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 88,200 32.100 120,300 $ 262,800 64,800 4.800 69,600 $ 235,500 Additionally, Sweet Valley purchased land of $20,900 by financing it 100% with long- term notes payable during 2018. During the year, there were no sales of land, no retirements of stock, and no treasury stock transactions. A plant asset was disposed of for $0. The cost and the accumulated depreciation of the disposed asset was $13,240. Plant asset was acquired for cash. Requirements 1. Prepare the 2018 statement of cash flows, formatting operating activities by the indirect method 2. How will what you learned in this problem help you evaluate an investment