The 2017 and 2016 balance sheets of Wallace Corporation follow. The 2017 income statement is also provided. WallaceWallace had no noncash investing and financing transactions during 2017. During the year, the company sold equipment for $15,300, which had originally cost $13,600 and had a book value of $11,400. The company did not issue any notes payable during the year but did issue common stock for $35,000. The company purchased plant assets and long-term investments with cash.

Wallace Corporation
Income Statement
For the Year Ended December 31, 2017
Sales revenues			$348,000
Less: Cost of goods sold			73,000
Gross profit			$275,000
Less operating expenses:
Salaries and wages expense		$26,000
Depreciation expense		4,600
Other operating expenses		14,000
	Total operating expenses		44,600
Operating income			$230,400
Plus other income and less other expenses:
Interest expense		9,700
Gain on sale of PP&E		3,900
	Total other income and expenses		5,800
Income before income taxes			224,600
Less: Income tax expense			37,300
Net income			$187,300

Wallace Corporation
Comparative Balance Sheets
December 31, 2017 and 2016
Assets		2017	2016
Current assets:
Cash		$52,000	$23,500
Accounts receivable		31,800	29,700
Inventory		86,000	93,600
Prepaid insurance		3,000	2,400
Total current assets		$172,800	$149,200
Property, plant, and equipment		155,000	136,000
Less: Accumulated depreciation		(30,200)	(27,800)
Investments		115,000	0
Total assets		$412,600	$257,400
Liabilities
Current liabilities:
Accounts payable		$33,000	$36,600
Wages payable		2,600	7,700
Interest payable		2,500	0
Income taxes payable		5,200	0
Other accrued expenses payable		18,600	22,100
Total current liablities		$61,900	$66,400
Long-term liabilities		77,000	116,000
Total liabilities		$138,900	$182,400
Stockholders' equity
Common stock		$107,000	$72,000
Retained earnings		166,700	3,000
Total stockholders' equity		$273,700	$75,000
Total liabilities and equity		$412,600	$257,400

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Requirements

1. Prepare the statement of cash flows for WallaceWallace Corporation for 2017 using the indirect method.

2. Evaluate the company's cash flows for the year. Discuss each of the categories of cash flows in your response.