The following are Sheridan Corp.'s comparative balance sheet accounts at December 31, 2017, and 2016, with a column showing the increase (decrease) from 2016 to 2017.
COMPARATIVE BALANCE SHEETS
2017 2016 Increase (Decrease)
Cash $806,900 $700,900 $106,000
Accounts receivable 1,131,700 1,159,400 (27,700 )
Inventory 1,842,900 1,730,100 112,800
Property, plant, and equipment 3,300,200 2,968,200 332,000
Accumulated depreciation (1,173,600) (1,037,600) (136,000)
Investment in Myers Co. 307,300 277,000 30,300
Loan receivable 247,500 ? 247,500
Total assets $6,462,900 $5,798,000 $664,900
Accounts payable $1,020,900 $950,800 $70,100
Income taxes payable 30,000 50,200 (20,200 )
Dividends payable 80,500 100,500 (20,000)
Lease liabililty 392,000 ? 392,000
Common stock, $1 par 500,000 500,000 ?
Paid-in capital in excess of par-common stock 1,489,000 1,489,000 ?
Retained earnings 2,950,500 2,707,500 243,000
Total liabilities and stockholders' equity $6,462,900 $5,798,000 $664,900
Additional information:
1. On December 31, 2016, Sheridan acquired 25% of Myers Co.'s common stock for $277,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,108,000. Myers reported income of $121,200 for the year ended December 31, 2017. No dividend was paid on Myers's common stock during the year.
2. During 2017, Sheridan loaned $291,600 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $44,100, plus interest at 10%, on December 31, 2017.
3. On January 2, 2017, Sheridan sold equipment costing $60,000, with a carrying amount of $38,100, for $40,400 cash.
4. On December 31, 2017, Sheridan entered into a capital lease for an office building. The present value of the annual rental payments is $392,000, which equals the fair value of the building. Sheridan made the first rental payment of $59,900 when due on January 2, 2018.
5. Net income for 2017 was $323,500.
6. Sheridan declared and paid the following cash dividends for 2017 and 2016.
2017 2016
Declared
December 15, 2017
December 15, 2016
Paid February 28, 2018
February 28, 2017
Amount $80,500 $100,500
Required:
1. Prepare a statement of cash flows for Sheridan Corp. for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

a) A Statement of Cash Flows is a financial statement prepared for a period, and it shows the inflows and outflows of cash based on three classifications: Operating activities, financing activities, and investing activities. It shows how well a company generates cash and has been able to manage its cash resources in its operating, financing, and investing activities.

b) The indirect method is one of the two accounting treatments used to prepare a cash flow statement. The indirect method uses increases and decreases in balance sheet line items to modify the operating section of the cash flow statement from the accrual method to cash method of accounting.

c) Investment in Myers which increased by $30,300 does not involve a cash flow since Myers did not pay any cash dividend. The increase was the result of accounting for the 25% investment in Myers using the equity method, which results for the recognition of Myers profit for the year.

d) The capital lease did not involve any cash flow in 2017, so the rental payment is not taken into account in the current Statement of cash flows.