P23-5B (SCF—Indirect Method) You have completed the field work in connection with your audit of Clark Corporation for the year ended December 31, 2017. The balance sheet accounts at the beginning and end of the year are shown:

Your working papers from the audit contain the following information:

1. On November 1, 2017, 25,000 shares of $1 par stock were sold for $175,000.

2. A patent was purchased for $31,000.

3. During the year, equipment that had a cost basis of $26,400 and on which there was accumulated depreciation of $5,800 was sold for $15,000. No other plant assets were sold during the year.

4. The 10%, $300,000 40-year bonds were dated and issued on January 2, 2004. Interest was payable on June 30 and December 31. They were sold originally at 97. These bonds were retired at 101 plus accrued interest on May 31, 2017.

5. The 6%, $400,000 20-year bonds were dated January 1, 2017, and were sold on May 31 at 102 plus accrued interest. Interest is payable semiannually on June 30 and December 31. Expense of issuance was $1,200.

6. Clark Corporation acquired 60% control in Pediatric Company on January 2, 2017, for $146,000. The income statement of Pediatric Company for 2017 shows a net income of $90,000.

7. Extraordinary repairs to buildings of $12,600 were charged to Accumulated Depreciation—Buildings.

8. Interest paid in 2017 was $31,000 and income taxes paid were $38,000.

9. Net income for the year totalled $76,538.

Instructions

From the information given, prepare a statement of cash flows using the indirect method. A worksheet is not necessary, but the principal computations should be supported by schedules or general ledger accounts. The company uses straight-line amortization for bond interest.