Statement of Cash Flows-Direct Method The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 2015, is as follows: Dec. 31, 2016 Dec. 31, 2045 Assets Cash Accounts receivable (net) Inventories $290,100 105,090 296,680 $267,690 96,140 284,650 110,280 Investments Land Equipment 152,170 327,320 (76,630) $1,094,730 Accumulated depreciation 251,660 (67,860) $942,560 Total assets $185,680 24,510 8,480 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $198,150 Accrued expenses payable (operating expenses) 19,710 Dividends payable 10,950 Common stock, $10 par 59,120 Pald-in capital: Excess of issue price over par-common stock 222,230 Retained earnings 584,570 Total liabilities and stockholders' equity $1,094,730 The income statement for the year ended December 31, 2016, is as follows: 46,190 128,190 549,510 $942,560 Sales Cost of goods sold $1,757,820 723,800 $1,034,020 Gross profit $1,034,020 Gross profit Operating expenses: Depreciation expense Other operating expenses Total operating expenses $8,770 912,730 921,500 $112,520 Operating income Other expense: Loss on sale of investments Income before income tax (29,780) $82,740 Income tax expense 26,480 Net income 56,260 Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $80,500 cash. d. The common stock was issued for cash. e. There was a $21,200 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Canace Products Inc. Statement of Cash Flows For the Year Ended December 31, 2016 Cash flows from operating activities: Cash received from customers Cash payments for merchandise Cash payments for operating expenses Cash payments for income taxes For the Year Ended December 31, 2016 Cash flows from operating activities: Cash received from customers Cash payments for merchandise Cash payments for operating expenses Cash payments for income taxes Net cash flow from operating activities Cash flows from Investing activities: Cash received from sale of investments Cash paid for purchase of land Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Change in cash Cash at the beginning of the year Cash at the end of the year
