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Problem 23-3 Pearl Company has not yet prepared a formal statement of cash flows for the 2017 fiscal year. Comparative balance sheets as of December 31, 2016 and 2017, and a statement of income and retained earnings for the year ended December 31, 2017, are presented as follows. PEARL COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2017 ($000 OMITTED) Sales revenue $3,840 Expenses Cost of goods sold $1,190 Salaries and benefits 720 Heat, light, and power 70 Depreciation 80 Property taxes 20 Patent amortization 30 Miscellaneous expenses 10 Interest 30 2,150 Income before income taxes 1,690 Income taxes 845 Net income 845 Retained earningsJan. 1, 2017 300 1,145 Stock dividend declared and issued 615 Retained earningsDec. 31, 2017 $530 PEARL COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31 ($000 OMITTED) Assets 2017 2016 Current assets Cash $337 $90 U.S. Treasury notes (available-for-sale) 10 50 Accounts receivable 780 490 Inventory 710 570 Total current assets 1,837 1,200 Long-term assets Land 160 80 Buildings and equipment 920 610 Accumulated depreciationbuildings and equipment (190 ) (110 ) Patents (less amortization) 120 150 Total long-term assets 1,010 730 Total assets $2,847 $1,930 Liabilities and Stockholders Equity Current liabilities Accounts payable $423 $360 Income taxes payable 39 30 Notes payable 340 340 Total current liabilities 802 730 Long-term notes payabledue 2019 180 180 Total liabilities 982 910 Stockholders equity Common stock 1,335 720 Retained earnings 530 300 Total stockholders equity 1,865 1,020 Total liabilities and stockholders equity $2,847 $1,930 Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) PEARL COMPANY

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