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Sages Custom Clothing (SCC) sells branded clothing to resorts and corporations. The companys comparative financial statements are presented below.

SAGES CUSTOM CLOTHING STATEMENT OF FINANCIAL POSITION December 31
Current Assets		2017		2016
Cash		157,000		73,800
Accounts receivable		30,000		24,200
Merchandise inventory		67,000		44,200
Prepaid expenses		10,200		3,200
Total current assets		264,200		145,400
Property and equipment
Property and equipment		98,000		135,000
Less: Accumulated depreciation		54,500		72,300
Net property and equipment		43,500		62,700
TOTAL ASSETS		$307,700		$208,100
Current liabilities
Accounts payable		25,200		33,200
Salaries payable		9,500		5,300
Interest payable		5,000		8,400
Total current liabilities		39,700		46,900
Loan payable		122,000		93,000
Total liabilities		161,700		139,900
Shareholders' equity
Common shares		20,900		1,500
Retained earnings		125,100		66,700
Total shareholders' equity		146,000		68,200
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$307,700		$208,100

SAGES CUSTOM CLOTHING INCOME STATEMENT For the Years Ended December 31
		2017		2016
Sales		855,000		779,000
Cost of sales		652,000		564,000
Gross margin		203,000		215,000
Expenses
Salary expense		83,000		107,000
Interest expense		5,100		1,900
Other expenses		8,200		6,300
Depreciation expense		11,000		11,800
Total expenses		107,300		127,000
Operating income		95,700		88,000
Loss on sale of equipment		3,200		1,000
Income tax expense		23,925		18,200
Net income		68,575		68,800

Following is additional information concerning SCCs transactions during the year ended December 31, 2017:

		Equipment costing $35,000 was purchased by paying $26,000 cash and issuing 400 common shares.
		Equipment costing $72,000 that was purchased at the beginning of 2016 was sold at the end of 2017 for $40,000. Straight-line depreciation had been used with an expected asset life of 5 years and a residual value of $0.
		The other expenses relate to prepaid items.
		In order to supplement its cash, SCC increased its bank loan by $29,000.
		Cash dividends of $10,175 were paid at the end of the fiscal year.
		Cost of sales includes $175,000 of direct labour costs.

Prepare a statement of cash flows for SCC for the year ended December 31, 2017, using the indirect method. Include any note disclosure on non-cash financing and investing transactions.

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