Buddies? Dive In Company was started several years ago by two diving instructors. The company?s comparative balance sheets and income statement are presented below, followed by additional information.

Additional notes:

a. Prepaid Expenses relate to rent paid in advance.

b. Other Operating Expenses were paid in cash.

c. An owner contributed capital by paying $200 cash in exchange for company shares.

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.

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2017 2016 Balance Sheet at December 31 $ 3,200 $4,000 Cash 500 Accounts Receivable 1,000 Prepaid Expenses 100 $ 4,300 $4,550 $ 350 $1,100 Wages Payable Contributed Capital 1,200 1,000 Retained Earnings 2,750 2,450 $ 4,300 $4,550 Income Statement for 2017 $33,950 Lessons Revenue Wages Expense Other Operating Expenses 30,000 3,650 $ 300 Net Income