Part 1. Operating Activities Part 2. Investing Activities Part 3. Financing Activities Part 4. Net Cash Flows and Check.

Part 1: Prepare the Operating Activities Section of the Statement of Cash Flows for Duke Company using the INDIRECT METHOD.

You will use the following information for each part:

Condensed financial data of Duke Company appear below:

Duke COMPANY

Comparative Balance Sheet

December 31

2017 2016

Assets

Cash $ 41,000 $ 35,000

Accounts receivable 75,000 53,000

Inventories 120,000 132,000

Prepaid expenses 19,000 25,000

Investments 100,000 75,000

Plant assets 325,000 250,000

Accumulated depreciation (65,000) (60,000)

Total $615,000 $510,000

Liabilities and Stockholders' Equity

Accounts payable $ 93,000 $ 75,000

Accrued expenses payable 29,000 24,000

Bonds payable 120,000 160,000

Common stock 275,000 170,000

Retained earnings 98,000 81,000

Total $615,000 $510,000

Duke COMPANY

Income Statement

For the Year Ended December 31, 2017

Sales $450,000

Less:

Cost of goods sold $300,000

Operating expenses (excluding depreciation) 60,000

Depreciation expense 17,000

Income taxes 20,000

Interest expense 18,000

Loss on sale of plant assets 3,000 418,000

Net income $ 32,000