Assume the same facts as CP12-4, except for additional data item (a) and the income statement. Instead of using the data from item (a), assume that the company bought new golf clubs for $3,000 cash and sold existing clubs for $1,000 cash. The clubs that were sold cost $2,000 and had Accumulated Depreciation of $500 at the time of sale. The income statement follows.

Income Statement for 2017
Lessons Revenue....................................$75,000
Wages Expense.........................................68,000
Depreciation Expense................................1,000
Loss on Disposal of Equipment....................500
Income Tax Expense...................................1,000
Net Income...............................................$ 2,500

Required:

1. Prepare the statement of cash flows for the year ended December 31, 2017, using the indirect method.

2. Use the statement of cash flows to evaluate the company’s cash flows.