a)using indirect method, prepare cash flows for KLM

b) why did KLM have an increase in cash of $134,400 when it recorded Net income of only $56,000

c) compute and assess cash flow yield; cash flows to sales, cash flows to assets and free cash flow for 2016. What is you're assessment KLM's cash generating ability?

KLM, Inc.'s Comparative Balance Sheets for December 31, 2016 and 2015, are presented below Additional information about KLM'a operations during 2016 is as follows: (1) Net Income $56,000; (2) building and equipment depreciation expense amount, $30,000; and $6,000 respectively; (3) equipment that cost $27,000 with accumulated depreciation of$25,000 sold at a gain of$10,600; (4) purchased an equipment for $25,000; (5) patent amortization, S6,000; (6 purchase ofpatent, $2,000; (7) funds borrowed by signing notes payable, S50,000; (8) paid-down notes payable, S30,000; (9) land and building purchased for $324,000 by signing a mortgage for the total cost; (10) 3,000 shares of S20 par value common stock issued for total of S100,000; and (11) paid cash dividend, S18,000. Net Sales for the year, 1,120,000 KLM, Inc. Comparative Balance Sheets December 31, 2016 and 2015 2016 2015 Assets Cash 189,120 54,720 204,860 Accounts Receivable (Net) 150,860 225,780 Inventory 275,780 Prepaid Expenses 40,000 66,000 Equipment 68,000 Accumulated Depreciation- Equipment 29,000 -48,000 Land 50,000 Building 274,000 Accumulated Depreciation- Building 30,000 Patents 8,000 12,000 Total Assets 958,760 553,360 Liabilities and Stockholders' Equity Accounts Payable 21,500 73,500 Accrued Liabilities 24,600 Notes Payable 20,000 Mortgage Payable 324,000 Common Stock, $10 par value 360,000 300,000 Additional Paid-In Capital 114,400 74,400 Retained Earnings 118,860 80,860 Total Liabilities and Stockholders' Equity S 958,760 553,360 Required: a- Using indirect method, prepare a Statement of Cash Flows for KLM, Inc b- Why did KLM have an increase in cash of $134,400 when it recorded Net Income of only $56,000 Discuss and interpret. c- Compute and assess Cash Flow Yield; Cash Flows to Sales, Cash Flows to Assets and Free Cash Flow for 2016. What is your assessment KLM's cash generating abili