The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, is shown as follows: 1 Dec. 31, 2016 Dec. 31, 2015 2 Assets 3 Cash $643,400.00 $679,400.00 4 Accounts receivable (net) 566,800.00 547,400.00 5 Inventories 1,011,000.00 982,800.00 6 Investments 0.00 240,000.00 7 Land 520,000.00 0.00 8 Equipment 880,000.00 680,000.00 9 Accumulated depreciation-equipment (244,400.00) (200,400.00) 10 Total assets $3,376,800.00 $2,929,200.00 11 Liabilities and Stockholders Equity 12 Accounts payable (merchandise creditors) $771,800.00 $748,400.00 13 Accrued expenses payable (operating expenses) 63,400.00 70,800.00 14 Dividends payable 8,800.00 6,400.00 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 2,068,800.00 1,879,600.00 18 Total liabilities and stockholders equity $3,376,800.00 $2,929,200.00 The income statement for the year ended December 31, 2016, is as follows: 1 Sales $5,980,000.00 2 Cost of merchandise sold 2,452,000.00 3 Gross profit $3,528,000.00 4 Operating expenses: 5 Depreciation expense $44,000.00 6 Other operating expenses 3,100,000.00 7 Total operating expenses 3,144,000.00 8 Operating income $384,000.00 9 Other expense: 10 Loss on sale of investments (64,000.00) 11 Income before income tax $320,000.00 12 Income tax expense 102,800.00 13 Net income $217,200.00 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 $176,000 cash D. The common stock was issued for cash. E. There was a $28,000 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. Use the minus sign only to indicate the net cash outflows for each section. Deduct, Less or colons (:) will automatically appear if required.

12 Net cash flow from investing activities 13 14 Cash flows from financing activities 15 cash received from sale of common stock 16 Less: Cash paid for dividends 17 Net cash flow from financing activities 18 Increase in cash 19 Cash at the beginning of the year 20 Cash at the end of the year 12 Net cash flow from investing activities 13 14 Cash flows from financing activities 15 cash received from sale of common stock 16 Less: Cash paid for dividends 17 Net cash flow from financing activities 18 Increase in cash 19 Cash at the beginning of the year 20 Cash at the end of the year