Problem 23-9

Headland Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information.

		December 31
		2017		2016
Cash		$38,700		$13,100
Accounts receivable		12,400		10,100
Inventory		12,100		10,100
Equity investments		0		3,000
Buildings		0		29,500
Equipment		40,000		19,800
Copyrights		4,900		5,300
Totals		$108,100		$90,900
Allowance for doubtful accounts		$3,100		$4,600
Accumulated depreciationequipment		2,000		4,600
Accumulated depreciationbuildings		0		6,100
Accounts payable		4,900		4,100
Dividends payable		0		4,900
Notes payable, short-term (nontrade)		3,000		4,100
Long-term notes payable		36,000		25,000
Common stock		38,000		33,000
Retained earnings		21,100		4,500
		$108,100		$90,900

Additional data related to 2017 are as follows.

1.		Equipment that had cost $10,900 and was 30% depreciated at time of disposal was sold for $2,500.
2.		$5,000 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 $33,200 (net of $3,900 taxes).
5.		Equity investments (ownership is less than 20% of total shares) were sold at $1,500 above their cost. No unrealized gains or losses were recorded in 2017.
6.		Cash and long-term note for $16,000 were given for the acquisition of equipment.
7.		Interest of $2,000 and income taxes of $5,000 were paid in cash.

(a) Use the indirect method to analyze the above information and prepare a statement of cash flows for Headland. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)