Statement of Cash Flows Using a Work SheetIndirect Method (Appendix)

Wabash Corp. just completed another successful year, as indicated by the following income statement:

	For the Year Ended December 31, 2017

Sales revenue	$2,460,000
Cost of goods sold	1,400,000
Gross profit	$1,060,000
Operating expenses	460,000
Income before interest and taxes	$600,000
Interest expense	100,000
Income before taxes	$500,000
Income tax expense	150,000
Net income	$350,000

Presented here are comparative balance sheets:

	December 31
	2017		2016
Cash	$140,000		$210,000
Accounts receivable	60,000		145,000
Inventory	200,000		180,000
Prepayments	15,000		25,000
Total current assets	$415,000		$560,000
Land	$600,000		$700,000
Plant and equipment	850,000		600,000
Accumulated depreciation	(225,000)		(200,000)
Total long-term assets	$1,225,000		$1,100,000
Total assets	$1,640,000		$1,660,000
Accounts payable	$140,000		$120,000
Other accrued liabilities	50,000		55,000
Income taxes payable	80,000		115,000
Total current liabilities	$270,000		$290,000
Long-term bank loan payable	$200,000		$250,000
Common stock	$450,000		$400,000
Retained earnings	720,000		720,000
Total stockholders' equity	$1,170,000		$1,120,000
Total liabilities and stockholders' equity	$1,640,000		$1,660,000

Other information is as follows:

Dividends of $350,000 were declared and paid during the year.

Operating expenses include $25,000 of depreciation.

Land was sold for its book value, and new plant and equipment were acquired for cash.

Part of the bank loan was repaid, and additional common stock was issued for cash.

The president has asked you some questions about the year's results. She is very impressed with the profit margin of 14% (net income divided by sales revenue). She is bothered, however, by the decline in the company's cash balance during the year. One of the conditions of the existing bank loan is that the company maintain a minimum cash balance of $100,000.

Required:

1. Using the format in the chapter's appendix, prepare a statement of cash flows work sheet. If an amount box does not require an entry, leave it blank.

	Balances			Cash Inflows (Outflows)
Accounts	12/31/17	12/31/16	Changes	Operating	Investing	Financing
Cash
Accounts Receivable
Inventory
Prepayments
Land
Plant and Equipment
Accumulated Depreciation
Accounts Payable
Other Accrued Liabilities
Income Taxes Payable
Long-Term Bank Loan Payable
Common Stock
Retained Earnings
Net Income
Totals	$	$	$	$	$	$
Net increase (decrease) in cash				$

2. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activities section. Use the minus sign to indicate net loss, cash payments, cash outflows, or decreases in cash.

Wabash Corp.
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows from Operating Activities
	$
Adjustments to reconcile net income to net cash provided by operating activities:
	$
Cash Flows from Investing Activities
	$
	$
Cash Flows from Financing Activities
	$
	$
	$
Cash balance, December 31, 2016
Cash balance, December 31, 2017	$

3. During the year Wabash experienced a decrease in cash at the end of the year due to