QUESTION 6 (19 marks) Refer to the financial statements of Incom Corporation at the end of this exam. Additional information for the year ended December 31, 2017: a. Incom acquired manufacturing equipment of $10,000 during the year. No equipment was sold during the year. b. Cash received from sale of land was $32,000, for a gain of $12,000 on the sale. C. Incom declared and completed a stock dividend valued at $30,000 during 2017, and declared and paid a cash dividend of $19,000 during 2017. d. Incom redeemed $40,000 of bonds during 2017. The bonds were originally issued at par (there is no premium or discount attached to these bonds). e. During 2017, Incom renewed the short-term note payable for another year at the same amount. REQUIRED: Prepare a Statement of Cash Flows for the year ended December 31, 2017 in good form using the indirect method. INCOM CORPORATION Comparative Balance Sheet December 31 2017 2016 2015 $ Assets Cash Prepaid Expenses Accounts receivable Inventory Long-term investment Property, plant and equipment (net) Total Assets 65,000 15,000 65,000 160,000 120,000 175,000 600,000 $ 68,000 12,000 40,000 120,000 120,000 225,000 $ 585,000 75,000 35,000 25,000 110,000 210,000 455,000 $ $ $ $ 62,000 Liabilities and shareholders' equity Accounts payable Short-term notes payable Bonds payable Common shares (400,000 shares outstanding) Retained eamings Total liabilities and shareholders' equity 80,000 60,000 115,000 195,000 150,000 600,000 65,000 60,000 155,000 165,000 140,000 585,000 160,000 145,000 88,000 455,000 $ $ $ INCOM CORPORATION Income Statement Years Ended December 31 2017 $ 400,000 2016 $ 350,000 Net sales Expenses Cost of goods sold Depreciation expense Operating expenses Total expenses Income from operations 190,000 40,000 65,000 295,000 105,000 175,000 40,000 45,000 260,000 90,000 32,000 Other items Interest expense Gain from sale of land Total Income before income taxes 30,000 12,000 18,000 87,000 32,000 58,000 Income tax expense Net income 28,000 59,000 20,000 38,000 $ $