STELLAR INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,000 $7,100 51,500 Short-term debt investments (available-for-sale 34,60018,000 60,200 4,000 152,400 130,600 Accounts receivable 61,400 Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets 40,300 4,900 (34,800) (25,200) 45,700 49,800 $310,500 $296,000 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,100 $40,300 6,000 4,000 10,000 69,600 100,000 100,000 30,000 36,100 $310,500 $296,000 4,000 7,900 8,100 59,700 30,000 54,700 STELLAR INC INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income $333,450 174,300 159,150 118,800 40,350 $11,600 2,000 9,600 30,750 6,150 $24,600 Additional information: 1. Dividends in the amount of $6,000 were 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 $19,800 and was 70% depreciated was sold during 2017. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g.-15,000 STELLAR INC Statement of Cash Flows For the Year Ended December 31,2017 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Amortization of Copyright Gain on Sale of Equipment Increase in Accounts Receivable Increase in Salaries and Wages Payable Decrease in Inventories Increase in Prepaid Rent Increase in Accounts Payable Decrease in Income Taxes Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Purchase of Equipment Purchase of Investments Net Cash Used by Investing Activities Cash Flows from Financing Activities Principal Payment on Long-term Loan Dividend Payments Principal Payment on Short-term Loan Net Cash Used by Financing Activities