Statement of Cash Flows-Indirect Method The income statement for Astro Inc. for 2017 is as follows: Sales revenue Cost of goods sold Gross profit Operating expenses Loss before interest and taxes Interest expense Net loss For the Year Ended December 31, 2017 $500,000 400,000 $100,000 180,000 $(80,000) 36,000 $(116,000) Presented here are comparative balance sheets: Cash Accounts receivable Inventory Prepayments Total current assets Land plant and equipment Accumulated depreciation Total long-term assets December 31 2017 2016 $95,000 $80,000 50,000 75,000 100,000 150,000 55,000 45,000 $300,000 $350,000 $475,000 $400,000 870,000 800,000 (370,000) (300,000) $975,000 $900,000 $1,275,000 $1,250,000 Total assets December 31 2017 2016 Cash accounts receivable nventory Prepayments Total current assets Land Plant and equipment Accumulated depreciation Total long-term assets Total assets Accounts payable Other accrued liabilities Interest payable Total current liabilities Long-term bank loan payable Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $95,000 50,000 100,000 55,000 $300,000 $475,000 870,000 (370,000) $975,000 $1,275,000 $125,000 35,000 15,000 $175,000 $340,000 $450,000 310,000 $760,000 $1,275,000 $80,000 75,000 150,000 45,000 $350,000 $400,000 800,000 (300,000) $900,000 $1,250,000 $100,000 45,000 10,000 $ 155,000 $250,000 $400,000 445,000 $845,000 $1,250,000 Other information is as follows: a. Dividends of $19,000 were declared and paid during the year. b. Operating expenses include $70,000 of depreciation. c. Land and plant and equipment were acquired for cash, and additional stock was issued for cash. Cash als Ithe president has asked vou some questions ahen the inn a Dividends of $19,000 were declared and paid during the year b. Operating expenses include $70,000 of depreciation c. Land and plant and equipment were acquired for cash, and additional stock was issued for cash, Cash also was received from additional bank loans The president has asked you some questions about the year's results. He is disturbed with the 5116,000 net loss for the year. He notes, however, that the cash position at the end pithe vear is improved. He is confused about what appear to be conflicting signals: "How could we have possibily added to our bank accounts during such a terrible year of perations? Required: 1. Prepare a statement of cash flows for 2017 wing the indirect method in the Operating Activities section. Use the munus sign to indicata net loss, cash payments, cash outflows or decreases in cash Astro Inc. Statement of Cash Flows For The Year Ended December 31, 2017 Cash Flows from Operating Activities Netloss 116.000 Adjustments to reconcle net income to net cash provided by operating activities Depreciation.com 70.000 Decrease in accounts receivable Decrease in inventory Increase in turnaments Increase in accounts payan Derrame in other accrued liabilities Increasi interest payable Net cash used by operating activities il 70,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Decrease in accounts receivable Decrease in inventory Increase in prepayments Increase in accounts payable Decrease in other accrued liabilities Increase in interest payable Net cash used by operating activities Cash Flows from Investing Activities Acquisition of land Acquisition of plant and equipment Net cash used by investing activities 0000000000 Cash Flows from Financing Activities Additional long-term borrowings Issuance of common stock Cash dividends paid Net cash provided by financing activities Net decrease in cash Cash balance, December 31, 2016 Cash balance, December 31, 2017 2. Despite a net loss for the year, Astro was able to increase its cash at the end of the year due to payment of dividends. Astro can increase its net profits by Increasing its sales collections and reducing depreciation