Preparing a Statement of Cash Flows (Direct Method) Rainbow Company's income statement and comparative balance sheets follow. RAINBOW COMPANY Income Statement For Year Ended December 31, 2016 $3,375,000 67,500 3,442,500 Sales Dividend Income Total Revenue Cost of Goods Sold Wages and Other Operating Expenses Depreciation Expense Patent Amortization Expense Interest Expense Income Tax Expense Loss on Sale of Equipment Gain on Sale of Investments $1,980,000 585,000 175,500 31,500 58,500 198,000 22,500 13,500) 3,037,500 $405,000 Net Income