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 2016 2017 Cash Accounts receivable Inventory Equity investments Buildings Equipment Copyrights $38,400 $12,800 10,000 10,000 3,000 29,600 20,100 5,200 $107,500 $90,700 12,300 12,100 0 0 39,700 5,000 Totals $4,400 4,500 6,000 4,000 5,100 4,000 25,000 33,000 4,700 $107,500 $90,700 $2,900 2,100 Allowance for doubtful accounts Accumulated depreciation-equipment Accumulated depreciation-buildings Accounts payable Dividends payable Notes payable, short-term (nontrade) Long-term notes payable Common stock Retained earnings 5,000 0 3,000 36,000 38,000 20,500 Additional data related to 2017 are as follows. 1. Equipment that had cost $11,200 and was 30% depreciated at time of disposal was sold for $2,600. 2. $5,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $5,100 4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $32,700 (net of $4,000 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). HEADLAND CORPORATION Statement of Cash Flows Adjustments to reconcile net income to Supplemental disclosures of cash flow information