Sanders Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year. (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. SANDERS COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 54,400 77,000 281,000 3,700 416,100 276,000 (60,000) $632,100 $ 69,400 59,000 257,000 4,600 390,000 189,000 (80,000) $499,000 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 56,100 13,000 69,100 85,000 154,100 $121,000 8,000 129,000 64,000 193,000 206,000 78,000 194,000 $632,100 180,000 0 126,000 $499,000 SANDERS COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 28,000 Other expenses 225,000 Other gains (losses) Loss on sale of equipment Income before taxe $993,000 371,000 622,000 253,000 (8.100) 360,900 3 AAA Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $8,100 (details in b). b. Sold equipment costing $75,000, with accumulated depreciation of $48,000, for $18,900 cash. c. Purchased equipment costing $162,000 by paying $36,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Paid $105,000 cash to reduce the long-term notes payable. f. Issued 5,200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $229,900. Requirement General Journal General Ledger Trial Balance Direct Method Indirect Method General Journal tab. Reconstruct the entries to summarize the activity between December 31, 2016 and December 31, 2017 Direct Method tab. Prepare the Statement of Cash flows for the year ended December 31, 2017 using the direct method, Indirect Method tab. Prepare the reconciliation to the indirect method