Problem 23-6 Comparative balance sheet accounts of Cullumber Inc. are presented below.

CULLUMBER INC.

COMPARATIVE BALANCE SHEET ACCOUNTS

AS OF DECEMBER 31, 2017 AND 2016

December 31

Debit Accounts 2017 2016

Cash $42,400 $33,800

Accounts Receivable 70,500 59,700

Inventory 30,300 24,200

Equity investments 22,100 38,300

Machinery 30,200 18,500

Buildings 67,500 55,800

Land 7,400 7,400

Total $270,400 $237,700

Credit Accounts

Allowance for Doubtful Accounts $2,300 $1,500

Accumulated DepreciationMachinery 5,500 2,300

Accumulated DepreciationBuildings 13,500 8,900

Accounts Payable 34,700 24,700

Accrued Payables 3,300 2,700

Long-Term Notes Payable 20,800 31,000

Common Stock, no-par 150,000 125,000

Retained Earnings 40,300 41,600

Totals $270,400 $237,700

Additional data (ignoring taxes):

1. Net income for the year was $44,800.

2. Cash dividends declared and paid during the year were $21,100.

3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized.

4. Equity investments (level of ownership is less than 20%) that cost $25,100 were sold during the year for $28,800. No unrealized gains and losses were recorded on these investments in 2017.

5. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250.

Cullumbers 2017 income statement follows (ignoring taxes).

Sales revenue $543,200

Less: Cost of goods sold 382,100

Gross margin 161,100

Less: Operating expenses (includes $8,550 depreciation and $5,537 bad debts) 119,200

Income from operations 41,900

Other: Gain on sale of investments $3,700

Loss on sale of machinery (800 )

totals 2,900

Net income $44,800

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Net cash flow from operating activities $

(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)