The comparative balance sheets and an income statement for Raceway Corporation follow.
Balance Sheets
As of December 31
2017 2016
Assets: Cash $64,258 $40,760
Accounts receivable $29,755 $21,820
Merchandise inventory $157,565 $173,320
Prepaid rent $2,330 $4,660
Equipment $251,960 $287,990
Accumulated depreciation ($145,630) ($235,310)
Land $190,720 $77,920
Total assets $550,958 $371,160
Liabilities: Accounts payable (inventory) $65,166 $73,920
Salaries payable $25,900 $22,200
Stockholder's equity: Common stock, $50 par value $245,500 $198,500
Retained earnings $214,392 $76,540
Total liabilities and equity $550,958 $371,160
Income Statement
For the Year Ended December 31, 2017
Sales $1,498,000
Cost of goods sold ($796,138)
Gross profit $701,862
Operating expenses: Depreciation expense ($24,150)
Rent expense ($25,380)
Salaries expense ($255,360)
Other operating expenses ($259,120)
Net income $137,852
Other Information:
1. Purchased land for $112,800.
2. Purchased new equipment for $96,500.
3. Sold old equipment that cost $132,530 with accumulated depreciation of $113,830 for $18,700 cash.
4. Issued common stock for $47,000.
Required:
Prepare the statement of cash flows for 2017 using the indirect method.