The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:

1		Dec. 31, 20Y6	Dec. 31, 20Y5
2	Assets
3	Cash	$643,460.00	$679,530.00
4	Accounts receivable (net)	566,490.00	548,320.00
5	Inventories	1,010,720.00	982,600.00
6	Investments	0.00	240,910.00
7	Land	519,510.00	0.00
8	Equipment	879,710.00	680,990.00
9	Accumulated depreciation	(243,750.00)	(200,970.00)
10	Total assets	$3,376,140.00	$2,931,380.00
11	Liabilities and Stockholders Equity
12	Accounts payable (merchandise creditors)	$772,290.00	$748,770.00
13	Accrued expenses payable (operating expenses)	63,970.00	69,800.00
14	Dividends payable	8,000.00	7,040.00
15	Common stock, $2 par	56,000.00	32,000.00
16	Paid-in capital: Excess of issue price over parcommon stock	408,000.00	192,000.00
17	Retained earnings	2,067,880.00	1,881,770.00
18	Total liabilities and stockholders equity	$3,376,140.00	$2,931,380.00

The income statement for the year ended December 31, 20Y6, is as follows:

1	Sales		$5,974,620.00
2	Cost of goods sold		2,451,470.00
3	Gross profit		$3,523,150.00
4	Operating expenses:
5	Depreciation expense	$42,780.00
6	Other operating expenses	3,099,440.00
7	Total operating expenses		3,142,220.00
8	Operating income		$380,930.00
9	Other expense:
10	Loss on sale of investments		(64,890.00)
11	Income before income tax		$316,040.00
12	Income tax expense		102,160.00
13	Net income		$213,880.00

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 $176,020 cash
	d. The common stock was issued for cash.
	e. There was a $27,770 debit to Retained Earnings for cash dividends declared.

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.

X

Labels and Amount Descriptions

Labels and Amount Descriptions
Cash paid for dividends
Cash paid for purchase of equipment
Cash paid for purchase of land
Cash paid for purchase of treasury stock
Cash payments for income taxes
Cash payments for merchandise
Cash payments for operating expenses
Cash received from customers
Cash received from sale of common stock
Cash received from sale of investments
Change in cash
December 31, 20Y6
Depreciation
For the Year Ended December 31, 20Y6
Gain on sale of investments
Issuance of common stock for acquisition of land
Issuance of common stock for purchase of equipment
Loss on sale of investments
Net cash flow from financing activities
Net cash flow from investing activities
Net cash flow from operating activities
Net cash flow used for financing activities
Net cash flow used for investing activities
Net cash flow used for operating activities

X

Statement of Cash Flows

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.

Canace Products Inc.

Statement of Cash Flows

1	Cash flows from operating activities:
2
3