The comparative balance sheet of Crossbow Novelties Corp. at December 31, 2017, reported the following:

Crossbow's transactions during 2017 included the following:

Requirements
1. Prepare the statement of cash flows of Crossbow Novelties Corp. for the year ended December 31, 2017. Use the indirect method to report cash flows from operating activities. Report non-cash investing and financing activities in an accompanying schedule.
2. Evaluate Crossbow's cash flows for the year. Mention all three categories of cash flows, and give the reason for your evaluation?

Transcribed Image Text:

December 31 2017 2016 Current Assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses Current Liabilities: Accounts payable Accrued liabilities Income tax $28,800 $12,500 28,600 29,300 53,000 3,700 51,600 4,200 31,100 28,000 14,300 16,800 11,000 14,300 a of ik4,000 ein exe1800 $17,800 2,000 ayet ofas divien00) 17,000 Issuance of common shares for cash. Stk divislea. Sale of long-term investment.... 105,600 Issuance of long-term note 3,000 6,000 payable to borrow cash Repayment of note payable by issuing common shares.. 30,000