Presented below are the financial statements of Skysong Company Ltd. SKYSONG COMPANY LTD. Comparative Statements of Financial Position December 31 Assets Equipment Accumulated depreciation-equipment Inventory Accounts receivable Cash Total Equity and Liabilities Share capital-ordinary Retained earnings Bonds payable Accounts payable Income taxes payable Total 2017 2016 59,270 77,050 (29,480) (23,030) 30,820 20,730 32,070 19,870 37,310 19,480 129,990 114,100 17,560 13,580 49,510 42,120 27,760 33,870 28,060 16,370 7,100 8,160 129,990 114,100 SKYSONG COMPANY LTD. Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations 241,040 176,520 64,520 23,770 40,750 Income from operations Interest expense Income before income taxes Income tax expense Net income Additional data: 40,750 3,610 37,140 7,320 29,820 1. Depreciation expense is 14,620. 2. Dividends declared and paid were 22,430. 3. During the year, equipment was sold for 9,610 cash. This equipment cost 17,780 originally and had accumu (a) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with ea SKYSONG COMPANY LTD. Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Increase in Accounts Payable Decrease in Income Taxes Payable 14.620 29,820 Decrease in Income Taxes Payable Increase in Accounts Receivable Decrease in Inventory Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Cash Flows from Financing Activities Issuance of Ordinary Shares Redemption of Bonds Payment of Dividends Net Cash Used by Financing Activities Net Increase in Cash Cash at Beginning of Period Cash Flows from Financing Activities Issuance of Ordinary Shares Redemption of Bonds Payment of Dividends Net Cash Used by Financing Activities Net Increase in Cash Cash at Beginning of Period Cash at End of Period