Whispering Winds Corp. Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Operating expenses Interest expense Loss on disposal of equipment Income before income taxes Income tax expense Net income $941,820 $472,100 229,800 11,970 2,020 715,890 225,930 64,830 $161,100 Additional information: 1. Operating expenses include depreciation expense of $40,160 2. Land was sold at its book value for cash. 3. Cash dividends of $85,680 were declared and paid in 2017 4. Equipment with a cost of $164,450 was purchased for cash. Equipment with a cost of $50,790 and a book value of $35,670 was sold for $33,650 cash. 5. Bonds of $49,810 were redeemed at their face value for cash. 6. Common stock ($1 par) of $171,150 was issued for cash.

              Statement of Cash Flows (Indirect Method) 2017

Cash flow from operating activities:

net income                                             $161,100

Adjustments to reconcile net income:

+ depreciation expense                         $40,160

+ loss on sale of equipment                   $2,020

Change in current assets:

- increase in accounts receivable      ($40,050)

- increase in inventory                         ($44,310)

+ increase in prepaid expenses             $1,980

Change in current liabilities:

+ increase in accounts payable             $2,580

- decrease in accrued exp. payable   ($10,070)

Net cash provided by operating activities $113,410

Cash flow from investing activities:

purchase of new equipment              ($164,450)

sale of old equipment                           $33,650

Net cash provided by investing activities ($130,800)

Cash flow from financing activities:

Proceeds from issue of new stocks     $171,150

- redemption of bonds                         ($49,180)

- dividends paid                                   ($85,680)

Net cash provided by financing activities $36,290

                          Net increase in cash $18,900

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