Indigo Inc., a greeting card company, had the following

Indigo Inc., a greeting card company, had the following

Subject: Business    / Accounting
Question
Indigo Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

INDIGO INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17    12/31/16
Cash    $5,900    $7,100
Accounts receivable    62,000    51,000
Short-term debt investments (available-for-sale)    35,000    18,100
Inventory    40,400    59,900
Prepaid rent    5,000    4,000
Equipment    153,300    129,100
Accumulated depreciation—equipment    (35,000    )    (24,800    )
Copyrights    46,300        50,300
Total assets    $312,900        $294,700
Accounts payable    $46,500    $40,200
Income taxes payable    4,100    6,100
Salaries and wages payable    8,100    4,100
Short-term loans payable    8,000    10,100
Long-term loans payable    60,600    69,600
Common stock, $10 par    100,000    100,000
Contributed capital, common stock    30,000    30,000
Retained earnings    55,600        34,600
Total liabilities & stockholders’ equity    $312,900        $294,700

INDIGO INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue    $338,150
Cost of goods sold    175,700
Gross profit    162,450
Operating expenses    119,400
Operating income    43,050
Interest expense    $11,300
Gain on sale of equipment    2,000    9,300
Income before tax    33,750
Income tax expense    6,750
Net income    $27,000

Additional information:

1.    Dividends in the amount of $6,000 were declared and paid during 2017.
2.    Depreciation expense and amortization expense are included in operating expenses.
3.    No unrealized gains or losses have occurred on the investments during the year.
4.    Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2017.

Prepare a statement of cash flows using the direct method.(Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

INDIGO INC.
Statement of Cash Flows
December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Dividend PaymentsSale of EquipmentPrincipal Payment on Short-term LoanCash Payments to SuppliersCash Payments for Operating ExpensesPrincipal Payment on Long-term LoanCash Received from CustomersCash Payments for InterestPurchase of EquipmentCash Payments for Income TaxesPurchase of Investments    $
Purchase of Equipment Cash Payments for Interest Cash Received from Customers Principal Payment on Long-term Loan Cash Payments for Income Taxes Dividend Payments Borrowing on Short-Term Loan Borrowing on Long-Term Loan Sale of Available-for-Sale Investments Cash Payments to Suppliers Cash Payments for Operating Expenses Sale of Equipment Purchase of Investments Principal Payment on Short-term Loan     $
Purchase of Equipment Purchase of Investments Principal Payment on Short-term Loan Sale of Equipment Cash Payments for Interest Sale of Available-for-Sale Investments Cash Payments to Suppliers Cash Payments for Income Taxes Borrowing on Short-Term Loan Cash Payments for Operating Expenses Principal Payment on Long-term Loan Dividend Payments Borrowing on Long-Term Loan Cash Received from Customers
Principal Payment on Long-term Loan Dividend Payments Borrowing on Long-Term Loan Sale of Available-for-Sale Investments Purchase of Investments Purchase of Equipment Cash Received from Customers Principal Payment on Short-term Loan Cash Payments for Income Taxes Cash Payments for Interest Sale of Equipment Cash Payments for Operating Expenses Cash Payments to Suppliers Borrowing on Short-Term Loan
Borrowing on Short-Term Loan Cash Payments for Interest Purchase of Equipment Principal Payment on Long-term Loan Cash Payments for Operating Expenses Principal Payment on Short-term Loan Cash Payments to Suppliers Borrowing on Long-Term Loan Cash Payments for Income Taxes Sale of Available-for-Sale Investments Sale of Equipment Dividend Payments Cash Received from Customers Purchase of Investments
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash Received from Customers Dividend Payments Purchase of Investments Principal Payment on Short-term Loan Sale of Available-for-Sale Investments Principal Payment on Long-term Loan Borrowing on Short-Term Loan Cash Payments to Suppliers Cash Payments for Operating Expenses Borrowing on Long-Term Loan Cash Payments for Interest Cash Payments for Income Taxes Sale of Equipment Purchase of Equipment
Principal Payment on Long-term Loan Cash Payments for Interest Principal Payment on Short-term Loan Borrowing on Short-Term Loan Cash Payments for Operating Expenses Sale of Available-for-Sale Investments Dividend Payments Borrowing on Long-Term Loan Cash Payments for Income Taxes Cash Received from Customers Cash Payments to Suppliers Sale of Equipment Purchase of Equipment Purchase of Investments
Purchase of Investments Dividend Payments Purchase of Equipment Cash Received from Customers Sale of Available-for-Sale Investments Sale of Equipment Cash Payments to Suppliers Principal Payment on Long-term Loan Borrowing on Short-Term Loan Cash Payments for Operating Expenses Borrowing on Long-Term Loan Cash Payments for Income Taxes Principal Payment on Short-term Loan Cash Payments for Interest
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash Payments to Suppliers Cash Payments for Operating Expenses Cash Received from Customers Cash Payments for Interest Cash Payments for Income Taxes Sale of Equipment Sale of Available-for-Sale Investments Dividend Payments Purchase of Equipment Purchase of Investments Borrowing on Short-Term Loan Principal Payment on Short-term Loan Principal Payment on Long-term Loan Borrowing on Long-Term Loan
Principal Payment on Short-term Loan Cash Payments for Income Taxes Cash Received from Customers Principal Payment on Long-term Loan Cash Payments for Interest Sale of Equipment Dividend Payments Borrowing on Short-Term Loan Cash Payments to Suppliers Cash Payments for Operating Expenses Borrowing on Long-Term Loan Sale of Available-for-Sale Investments Purchase of Equipment Purchase of Investments
Sale of Equipment Cash Payments for Operating Expenses Principal Payment on Short-term Loan Cash Received from Customers Cash Payments for Interest Principal Payment on Long-term Loan Purchase of Equipment Borrowing on Long-Term Loan Dividend Payments Purchase of Investments Sale of Available-for-Sale Investments Borrowing on Short-Term Loan Cash Payments for Income Taxes Cash Payments to Suppliers
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash