P16-34A Preparing the statement of cash flows-indirect method with non-cash transactions The 2018 income statement and comparative balance sheet of Rolling Hills, Inc. follow: ROLLING HILLS, INC. Income Statement Year Ended December 31, 2018 Net Sales Revenue $ 440,000 Cost of Goods Sold 209,200 Gross Profit 230,800 Operating Expenses: Salaries Expense $ 77,400 14,400 10,200 Depreciation Expense-Plant Assets Other Operating Expenses Total Operating Expenses Operating Income Other Income and (Expenses): 102,000 128,800 Interest Revenue 8,700 (21,100) (12,400) Interest Expense Total Other Income and (Expenses) Net Income Before Income Taxes 116,400 20,000 Income Tax Expense $ 96,400 Net Income ROLLING HILLS, INC Comparative lalance Sheet December 31, 2018 and 2017 2018 2017 Assets Current Assets $ 26,900 Cash $ 15,700 25,400 Accounts Receivable Merchandise Inventory 26.500 79.800 91.500 Long-term Assets Land 35,100 14,000 124,840 114,650 Plant Assets (18,940) Accumulated Depreciation--Plant Assets (17.950) $ 243,300 5 274,200 Total Assets Liabilities Current Liabilities: Accounts Payable $ 35,700 $ 30,400 28,700 30,300 Accrued Liabilities 79,000 108,000 Long-term Liabilities: Notes Payable Total Liabilities 143,400 168,700 Stockholders' Equity 88,900 64,500 Common Stock, no par 41,900 10,100 Retained Earnings 130,800 74,600 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 5 274,200 $ 243,300 Additionally, Rolling Hills purchased land of $21,100 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 $13410 The plant acquisition was for cash. Requirements 1. Prepare the 2018 statement of cash flows, formatting operating activities by the indired method. 2. How will what you learned in this problem help you evaluate an investment