PROBLEMS n23.1 (L02.4) (SCF-Indirect Method) The following are Sullivan Corp.'s comparative balance sheet accounts at Decemb- 31 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017 COMPARATIVE BALANCE SHESTS Increase (Decrease) 2017 2016 Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Investment in Myers Co. Loan receivable $ 815,000 1,128,000 1,850,000 3,307,000 (1,165,000) 310.000 250,000 S 700,000 1,168,000 1,715,000 2.967,000 (1,040,000) 275,000 $115,000 (40,000) 135,000 340,000 (125,000) 35,000 250,000 Total assets n lo ysunalaldg $6,495,000 b s$5,785,000 $710,000 Increase (Decrease) 000,0E2 anibliud sno abgoong ao al boolliyd b 2017 2016 Accounts payable Income taxes payable mo adl Dividends payable Lease liability Common stock, $1 par Paid-in capital in excess of par-common stock Retained earnings Total liabilities and stockholders' equity $ 955,000 50,000 100,000 S 60,000 $1,015,000 30,000 (20,000) (20,000) 400,000 dt baaa 80,000 400,000 500,000 500,000 1,500,000 2,970,000 1,500,000 2.680,000 290.000 $6,495,000 $5,785,000 $710,000 nnucm Additional information: g foy ton b1. On December 31, 2016, Sullivan acquired 25% of Myers Co.'s common stock for $275,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2017. No dividend was paid on Myers's common stock during the year. 2. During 2017, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repay- ment of $50,000, plus interest at 10 % , on December 31, 2017. 3. On January 2, 2017, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash. 4. On December 31, 2017, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2018. 5. Net income for 2017 was $370,000. 6. Sullivan declared and paid the following cash dividends for 2017 and 2016. 2016 2017 December 15, 2016 February 28, 2017 $100,000 December 15, 2017 February 28, 2018 $80,000 Declared Paid Amount Instructions Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2017, using the indirect method. (AICPA adapted)