Problem 17-8A The financial statements for Facetime Corp. for the year ended December 31, 2017, are as follows Distingulshing among operating. investing, and finanding activities, using the finandal statements to compute the cash effects of a wide variety of business transactions; preparing a cash flow statement by the indirect method FACETIME CORP Balance Sheet December 31, 2017 and 2016 2016 2017 1. Net cash flow from operating, $586,000 investing, S(204,000) financing, $(430,000) Assets $ 18,000 $ 10,000 Cash 40,000 0 Investment in money market fund 175,000 Accounts receivable 189,000 610,000 Merchandise inventory 280,000 23,000 30,000 Prepaid expenses Plant and equipment 1,798,000 1,654,000 (120,000) (160,000) Less accumulated amortization 200,000 Investment Goodwill 90,000 100,000 Total assets $2,437,000 $2,500,000 Liabilities $ 176,000 Accounts payable $120,000 Salaries payable 110,000 100,000 Loan payable 350,000 400,000 Total liabilities 636,000 620,000 Shareholders' equity Preferred shares 800,000 500,000 Common shares 500,000 500,000 Retained earnings 501,000 880,000 Total shareholders' equity 1,801,000 1,880,000 Total liabilities and shareholders' equity $2,437,000 $2,500,000 FACETIME CORP Income Statoment For the Year Ended December 31, 2017 Net sales $1,600,000 Cost of goods sold Gross margin 840,000 760,000 Operating expenses Selling expenses Administrative expenses 350,000 230,000 Interest expense 40,000 Total operating expenses Operating income 620,000 140,000 Income taxes 39,000 Net income $ 101,000 Additional information: a. The administrative expenses included the following Amortization expense on plant and equipment, $100,000 Write-down of goodwill, $10,000. b. Sold equipment for its book value. The equipment cost $430,000 and had been amor- tized for $60,000 c Purchased additional equipment in December for $574,000 d. Issued preferred shares for an investment purchase of $200,000. e. Declared and paid cash dividends: preferred, $230,000, common, $250,000. Sold 20,000 preferred shares for $5.00 per share. & Paid $90,000 (of which $40,000 was interest) on the loans. I Required Activate 1. Prepare a cash flow statement for Facetime Corp. for the year ended December 31, 2017 using the indirect method. The investment in the money market fund is a cash equivalent. 2. Did the company improve its cash position in 2017? Give your reasons. Go to Setting O)