Presented below are the financial statements of Vaughn Company Ltd. VAUGHN COMPANY LTD. Comparative Statements of Financial Position December 31 Assets 2017 Equipment 59,780 Accumulated depreciation-equipment (29,340 ) Inventory 29,820 Accounts receivable 32,390 Cash 37,260 Total 129,910 2016 77,950 (23,700 ) 20,680 19,250 20,990 115,170 Equity and Liabilities Share capital-ordinary Retained earnings Bonds payable Accounts payable Income taxes payable Total 17,200 50,240 26,470 28,790 7,210 129,910 13,740 43,770 32,950 16,700 8,010 115,170 VAUGHN COMPANY LTD. Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net income 241,440 176,470 64,970 23,760 41,210 3,040 38,170 8,230 29,940 Additional data: 1. Depreciation expense is 14,120. 2. Dividends declared and paid were 23,470. 3. During the year, equipment was sold for 9,690 cash. This equipment cost 18,170 originally and had accumulated depreciation of 8,480 at the time of sale. (a) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) VAUGHN COMPANY LTD. Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income 29,940 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Increase in Accounts Payable Decrease in Income Taxes Payable Increase in Accounts Receivable Increase in Inventory Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Cash Flows from Financing Activities Issuance of Ordinary Shares Redemption of Bonds Payment of Dividends Net Cash Used by Financing Activities Net Increase in Cash Cash at Beginning of Period Cash at End of Period By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor