Problem 23-2 The comparative balance sheets for Sandhill Corporation show the following information.

December 31

2017 2016

Cash $33,800 $13,100

Accounts receivable 12,100 9,900

Inventory 12,000 8,900

Available-for-sale debt investments 0 3,000

Buildings 0 29,700

Equipment 44,500 19,800

Patents 5,100 6,200

Total: $107,500 $90,600

Allowance for doubtful accounts $3,100 $4,500

Accumulated depreciationequipment 2,000 4,500

Accumulated depreciationbuilding 0 6,100

Accounts payable 5,100 3,000

Dividends payable 0 4,900

Notes payable, short-term (nontrade) 3,000 3,900

Long-term notes payable 31,000 25,000

Common stock 43,000 33,000

Retained earnings 20,300 5,700

Total: $107,500 $90,600

Additional data related to 2017 are as follows.

1. Equipment that had cost $11,100 and was 40% depreciated at time of disposal was sold for $2,500.

2. $10,000 of the long-term note payable was paid by issuing common stock.

3. Cash dividends paid were $4,900.

4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,300 (net of $2,000 taxes).

5. Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past.

6. Cash was paid for the acquisition of equipment.

7. A long-term note for $16,000 was issued for the acquisition of equipment.

8. Interest of $2,000 and income taxes of $6,500 were paid in cash.

Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) SANDHILL CORPORATION

Statement of Cash Flows

For the Year Ended December 31,2017

Cash Flows from Operating Activites

....Net Income

adjustments to reconcile net income to

Net Cash Provided by Operating Activites

...Loss on Sale of Equipment

...Depreciation Expense

...Increase in Accounts Payable

...Patent Amortization

...Increase in Accounts Receivable

...Increase in Inventory

...Gain on Sale of Invesments

...Unknown account that is not Loss from Flood Damage

total

Net Cash Provided by Operating Activites

Cash Flows from Investing Activites

Sale of Investments

Sale of Equipment

Purchase of Equipment

Proceeds from Flood Damage to Building

Net Cash Provided by Investing Activites

Cash Flows from Finanacing Activites

Payment of Short-term Note Payable

Payment of Dividends

Net Cash Used by Financing Activites

Net Increase in Cash

Cash, January 1, 2017

Cash, Decemeber 31, 2017

Supplemental disclosures of cash flow information:

...Cash Paid During the Year for Income Taxes

...Cash Paid During the Year for Interest

Noncash Incesting and Financing Activities

..Purchased Equipment by Issuing Notes Payable

...Retired Notes Payable by Issuing Common Stock

Total