Transcribed image text: PR 14-4A Statement of cash flows-direct method The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, OBJ. 3 is as follows: cash flow from activities 0 Dec 31, 2016 Dec 31, 2015 Assets Cash Accounts receivable (net) $ 643,400 $ 679,400 Inventories 566,800 547,400 Investments 1,011,000 982,800 240,000 Land 520,000 0 Equipment. Accumulated depreciation B80,000 680,000 (244,400) (200,400) Total assets $3,376,800 $2,929,200 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 771,800 $ 748,400 Accrued expenses payable (operating expenses) 63,400 70,800 Dividends payable. 8,800 6,400 Common stock, $2 par 56,000 32.000 Paid-in capital: Excess of issue price over par--common stock 408,000 192,000 Retained earnings. 2,068,800 1,879,600 Total liabilities and stockholders' equity. $3,376,800 $2,929,200 The income statement for the year ended December 31, 2016, is as follows: Sales $5,980,000 Cost of merchandise sold 2.452,000 Gross profit.... $3,528,000 Operating expenses: Depreciation expense $ 44,000 Other operating expenses 3,100,000 Total operating expenses 3,144,000 Operating income. 5 384,000 Other expense: Loss on sale of investments (64,000) Income before income tax $ 320,000 Income tax expense 102,800 $ 217,200 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. (Continued) Statement of Cash Flows 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. Instructions Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities