Transaction data for the year ended June 30, 2018, follows: a. Net income, $71,000 b. Depreciation expense on equipment, $14,000 c. Purchased a long-term investment with cash, $16,800 d. Sold land for $63,600, including a $7,000 loss e. Acquired equipment by issuing a long-term note payable, $15,500 f. Paid off a long-term note payable, $58,600 g. Received cash for the issuance of common stock, $500 h. Paid cash dividends, $7,200 i. Paid off a short-term note payable by issuing common stock, $6,100 Noncash investing and financing activities: Acquisition of equipment by issuing long-term note payable Payment of short-term note payable by issuing common stock Total noncash investing and financing activities Requirement 1. Prepare the statement of cash flows of Mary McGuire Design Studio for the year ended June 30, 2018, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short-term Notes Payable changes result from operating transactions. Start by completing the cash flows from operating activities using the indirect method. Then complete the statem Question Viewer (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Data Table Mary McGuire Design Studio, Inc. Comparative Balance Sheets June 30, Increase 2018 2017 (Decrease) Current assets: Cash $ 28,900 $ 1,600 $ 27,300 Accounts receivable 59,000 52,000 7,000 Inventories 97,700 60,500 37,200 Prepaid expenses 3,700 2,100 1,600 Land 22,200 92,800 (70,600) Equipment, net Long-term investment 74,800 73,300 1,500 22,000 5,200 16,800 $ 308,300 $287,500 $ 20,800 Current liabilities: Notes payable, short-term $ 12,900 $ 19,000 $ (6,100) Accounts payable 34,300 41,500 (7,200) Income tax payable 13,400 14,800 (1,400) - Income tax payable 13,400 14,800 (1,400) Accrued liabilities 14,900 9,300 5,600 Interest payable 4,000 3,000 1,000 Salary payable Long-term note payable Common stock Retained earnings 4,800 3,200 1,600 50,700 93,800 (43,100) 68,100 61,500 6,600 105,200 41,400 63,800 $ 308,300 $ 287,500 $ 20,800 Mary McGuire Design Studio, Inc. Statement of Cash Flows (Indirect Method) Year Ended June 30, 2018 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Loss on sale of land Increase in accounts receivable Increase in inventories Increase in prepaid expenses Decrease in accounts payable Decrease in income tax payable Increase in accrued liabilities Increase in interest payable Increase in salary payable Net cash provided by (used for) operating activities Cash flows from investing activities: Sale of land Purchase of long-term investment Net cash provided by (used for) investing activities Cash flows from financing activities: Issuance of common stock Payment of long-term note payable Payment of cash dividends Net cash provided by (used for) financing activities Net increase (decrease) in cash Cash balance, June 30, 2017 Total cash payments Noncash investing and financing activities: Acquisition of equipment by issuing long-term note payable Payment of short-term note payable by issuing common stock