Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

SAGE INC.

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2017 AND 2016

12/31/17

12/31/16

Cash$5,900

$7,000

Accounts receivable61,500

51,300

Short-term debt investments (available-for-sale)35,000

17,800

Inventory40,400

60,200

Prepaid rent5,000

4,000

Equipment153,400

129,000

Accumulated depreciationequipment(35,100

)(25,100

)Copyrights46,300

49,600

Total assets$312,400

$293,800

Accounts payable$46,500

$40,200

Income taxes payable4,100

6,000

Salaries and wages payable8,100

4,000

Short-term loans payable7,900

10,000

Long-term loans payable60,200

68,700

Common stock, $10 par100,000

100,000

Contributed capital, common stock30,000

30,000

Retained earnings55,600

34,900

Total liabilities & stockholders' equity$312,400

$293,800

SAGE INC.

INCOME STATEMENT

FOR THE YEAR ENDING DECEMBER 31, 2017

Sales revenue$338,750

Cost of goods sold176,400

Gross profit162,350

Operating expenses119,600

Operating income42,750

Interest expense$11,500

Gain on sale of equipment2,000

9,500

Income before tax33,250

Income tax expense6,650

Net income$26,600

Additional information:

1.Dividends in the amount of $5,900were declared and paid during 2017.2.Depreciation expense and amortization expense are included in operating expenses.3.No unrealized gains or losses have occurred on the investments during the year.4.Equipment that had a cost of $19,900and was 70% depreciated was sold during 2017.

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