Statement of Cash Flows-Direct Method The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 20Y5, is as follows: Dec. 31, 20Y6 Dec. 31, 2045 Assets Cash $290,320 $270,690 Accounts receivable (net) 105,170 97,220 Inventories 296,910 287,850 Investments 111,520 Land 152,280 0 Equipment 327,570 254,490 Accumulated depreciation-equipment (76,690) (68,630) Total assets $1,095,560 $953,140 0 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $10 par Paid-in capital: Excess of issue price over par-common stock Retained earnings Total liabilities and stockholders' equity $198,300 19,720 10,960 59,160 222,400 585,020 $1,095,560 $187,770 24,780 8,580 46,700 129,630 555,680 $953,140 The income statement for the year ended December 31, 2016, is as follows: $1,638,370 674,600 $963,770 Sales Cost of merchandise sold Gross profit Operating expenses: Depreciation expense $8,060 Other operating expenses 850,840 Total operating expenses Operating income Other expense: Loss on sale of investments Income before income tax Income tax expense 858,900 $104,870 (30,110) $74,760 23,920 $50,840 Net income 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 $81,410 cash. d. The common stock was issued for cash. e. There was a $21,500 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, 2046 Cash flows from operating activities: Cash received from customers Cash payments for merchandise 1,646,320 673,130 855,900 23,920 Cash payments for operating expenses Cash payments for income taxes x 93,370 * Net cash flow from operating activities Cash flows from (used for) investing activities: Cash from sale of investments 81,410 Cash used for purchase of land -152,280 Cash used for purchase of equipment -73,080 143,950 X Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash from sale of common stock 111,520 19,120 X X Cash used for dividends Net cash flow from financing activities 92,400 * Increase in cash 19,630 270,690 Cash at the beginning of the year Cash at the end of the year 290,320