Vaughn Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

VAUGHN INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		12/31/17			12/31/16
Cash		$6,000			$6,900
Accounts receivable		62,500			50,900
Short-term debt investments (available-for-sale)		35,200			17,900
Inventory		40,300			59,500
Prepaid rent		4,900			4,100
Equipment		153,100			129,600
Accumulated depreciation—equipment		(35,200	)		(24,700	)
Copyrights		45,600			50,500
Total assets		$312,400			$294,700
Accounts payable		$46,300			$40,400
Income taxes payable		3,900			6,000
Salaries and wages payable		8,100			3,900
Short-term loans payable		8,100			10,100
Long-term loans payable		60,200			69,400
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		53,600			35,200
Total liabilities & stockholders’ equity		$310,200			$295,000

VAUGHN INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue				$335,075
Cost of goods sold				175,200
Gross profit				159,875
Operating expenses				120,100
Operating income				39,775
Interest expense		$11,400
Gain on sale of equipment		2,000		9,400
Income before tax				30,375
Income tax expense				6,075
Net income				$24,300

Additional information:

1.		Dividends in the amount of $5,900 were declared and paid during 2017.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017.

Prepare a statement of cash flows using the indirect method.

Answer rating: 100% (QA)

Cashflow Statement using Indirect Method Particulars Amount Amount Cashflow from Operations 24300 Ne... View the full answer