Statement of Cash Flows-Direct Method The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2045, is as follows: Dec. 31, 2016 Dec. 31, 2045 Assets Cash $317,240 $296,130 114,930 106,360 324,430 314,900 0 122,000 Accounts receivable (net) Inventories Investments Land Equipment Accumulated depreciation equipment 166,400 0 278,400 357,940 (83,800) (75,080) Total assets $1,197,140 $1,042,710 $205,410 27,110 9,380 Liabilities and Stockholders' Equity Accounts payable $216,680 Accrued expenses payable 21,550 Dividends payable 11,970 Common stock, $10 par 64,650 Paid-in capital: Excess of issue price over par-common stock 243,020 Retained earnings 639,270 Total liabilities and stockholders' equity $1,197,140 The income statement for the year ended December 31, 2016, is as follows: 51,090 141,810 607,910 $1,042,710 Sales $1,775,020 Cost of merchandise sold 730,900 Gross profit $1,044,120 Operating expenses: Depreciation expense $8,720 Other operating expenses 921,780 Total operating expenses 930,500 Operating income $113,620 Other expense: Loss on sale of investments (32,940) Income before income tax $80,680 Income tax expense 25,820 Net income $54,860 Additional data obtained from an examination of the accounts in the ledger for 2016 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 $89,060 cash. d. The common stock was issued for cash. e. There was a $23,500 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 outflows, cash payments, decreases in cash, or any negative adjustments. Canace Products Inc. Statement of Cash Flows For the Year Ended December 31, 2016 Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, 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 $ 1,766,450 Cash payments for merchandise Cash payments for operating expenses X Cash payments for income taxes Net cash flow from operating activities Cash flows from (used for) investing activities: Cash from sale of investments $ Cash used for purchase of land Cash used for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash from sale of common stock Cash used for dividends Net cash flow from financing activities Increase in cash Cash at the beginning of the year Cash at the end of the year
