Problem 23-4 Vaughn Company had the following information available at the end of 2017. VAUGHNCOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND 2016 2017 2016 Cash $10,090 $3,960 Accounts receivable 20,420 12,880 Short-term investments 21,900 30,120 Inventory 41,880 35,100 Prepaid rent 3,010 12,090 Prepaid insurance 2,080 90 Supplies 1,010 75 Land 123,790 175,990 Buildings 352,890 352,890 Accumulated depreciationbuildings (105,450 ) (87,170 ) Equipment 523,690 398,650 Accumulated depreciationequipment (130,800 ) (112,550 ) Patents 44,830 49,530 Total assets $909,340 $871,655 Accounts payable $21,890 $32,080 Income taxes payable 5,020 3,990 Salaries and wages payable 5,000 3,030 Short-term notes payable 10,100 10,100 Long-term notes payable 60,090 70,350 Bonds payable 402,480 402,480 Premium on bonds payable 13,780 23,185 Common stock 241,670 219,820 Paid-in capital in excess of parcommon stock 25,220 17,450 Retained earnings 124,090 89,170 Total liabilities and stockholders equity $909,340 $871,655 VAUGHN COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $1,169,440 Cost of goods sold 745,640 423,800 Gross margin Operating expenses Selling expenses $79,900 Administrative expenses 157,280 Depreciation/Amortization expense 41,230 Total operating expenses 278,410 Income from operations 145,390 Other revenues/expenses Gain on sale of land 7,990 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (52,070 ) (37,680 ) Income before taxes 107,710 Income tax expense 39,690 Net income 68,020 Dividends to common stockholders (33,100 ) To retained earnings $34,920

Prepare a statement of cash flows for Vaughn Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)