Statement of Cash Flow

Dano Company's comparative balance sheet and income statement for last year appear below: Comparative Balance Sheet Cash Accounts receivable Inventory Prepaid expenses Long-term investments Plant and equipment Accumulated depreciation Total assets 12/31/16 $ 23,000 69,000 49,000 15,000 190,000 450,000 on (273,000 (231,000) 633,000 $565,000 12/31/17 $57,000 90,000 30,000 9,000 270,000 450,000 Accounts payable Accrued liabilities Taxes payable Bonds payable Deferred taxes Common stock Retained earnings Total liabilities and owners equi $ 45,000 24,000 25,000 100,000 24,000 110,000 237,000 S633,000S565,000 $22,000 31,000 18,000 60,000 39,000 140,000 323 000 Income Statement For the Year Ended December 31,2017 $850,000 410,000 440,000 280,000 160,000 48,000 $112,000 Sales s: costs of goods sold Gross margin Less: operating expenses Net operating income Less: income taxes Net income The company declared and paid $26,000 in cash dividends during the year. Required: Write a letter to the president of the company explaining the cash flows that occurred during this accounting year for the following situations: a. Using the indirect method, construct in good form the Statement of Cash Flows for the year b. Using the direct method, construct in good form the Statement of Cash Flows for the year