The 2017 and 2016 balance sheets of Rabb Corporation follow. The 2017 income statement is also provided. Rabb had no noncash investing and financing transactions during 2017. During the year, the company sold equipment for $15,100, which had originally cost $13,500 and had a book value of $10,500. The company did not issue any notes payable during the year but did issue common stock for $31,000. The company purchased plant assets and long-term investments with cash.

Requirements
1. Prepare the statement of cash flows for Rabb Corporation for 2017 using the indirect method.
2. Evaluate the company's cash flows for the year. Discuss each of the categories of cash flows in your response.

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Rabb Corporation Income Statement For the Year Ended December 31, 2017 3. 347,000 76,000 271,000 Sales revenues 6 Less: Cost of goods sold 7 Gross profit 8 Less operating expenses: Salarles and wages expense 24,500 5,900 13,000 9. Depreciation expense 10 Other operating expenses 11 Total operating expenses 43,400 227,600 12 13 Operating Income 14 Plus other Income and less other expenses: Interest expense Gain on sale of PP&E Total other income and expenses 9,900 4,600 15 16 17 18 Income before Income taxes 19 Less: Income tax expense 20 Net income 21 5,300 222,300 31 000 185,300 IS Rabb Corporatlon Comparative Balance Sheets December 31, 2017 and 2016 Assets 2017 2016 5 Current assets: 6 Cash 7 Accounts recelvable 8 Inventory 9 Prepald Insurance 10 11 12 Property, plant, and equipment 13 Less: Accumulated depreclation 14 Investments 15 Total assets 16 17 18 Current llablitles: 19 Accounts payable 20 Wages payable 21 Interest payable 22 Income taxes payable 51,500 S 32,300 86,500 3,300 173,600 $ 20,500 29,100 93,000 2,600 145,200 Total current assets 152,000 (30,300) 117,000 412,300 S 138,000 (27,400) 255,800 Liabilities 36,500 33,900 $ 2,900 2,100 5,400 1,300