The comparative balance sheets and an income statement for Raceway Corporation follow Balance Sheets As of December 31 2017 2016 Assets Cash Accounts receivable Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land $ 6,300 48,400 7,260 56,000 2,140 140,000 144,000 (73,400) (118,000) 50,000 10,200 45,200 700 116,000 Total assets $245,000 $189,800 Liabilities Accounts payable (inventory) Salaries payable $37,200 12,200 40,000 10,600 Stockholders' equity Common stock,$50 par value Retained earnings 150,000 45,600 120,000 19,200 Total liabilities and equity $245,000 $189,800 Income Statement For the Year Ended December 31, 2017 480,000 Sales Cost of goods sold (264,000) Gross profit Operating expenses 216,000 Depreciation expense Rent expense Salaries expense Other operating expenses (11,400) (7,000) (95,200) (76,000) Net income $ 26,400 Other Information 1. Purchased land for $66,000 2. Purchased new equipment for $62,000 3. Sold old equipment that cost $66,000 with accumulated depreciation of $56,000 for $10,000 cash . Issued common stock for $30,000 Required Prepare the statement of cash flows for 2017 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) RACEWAY CORPORATION Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net income Plus: Decreases in current assets and Increases in current liabilities s 26,400 Depreciation expense Increase in accounts receivable Decrease in inventory Decrease in prepaid rent 11,400 (2,940) 10,800 (2,800) Less: Increases in Current Assets and Decreases in current liabilities Increase in salaries payable 1,600 Plus: Noncash charges Net cash inflow from operating activities Cash flows from investing activities: $44,460 Paid to purchase land Paid to purchase equipment Proceeds from sale of equipment (66,000) (62,000) 10,000 Net cash inflow from investing activities Cash flows from financing activities: (118,000) Proceeds from stock issue 30,000 Net cash inflow from financing activities Net decrease in cash Plus: Beginning cash balance Ending cash balance Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted 30,000 (43,540) 48,400 $ 4,860