The following arc Farrell Corporation€™s balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31,2016:

Additional information:
a. On January' 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $ 19,000 cash.
b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash.
c. On May 14,2016, Farrell sold all of its treasury' stock for $25,000 cash.
d. On June 1,2016, Farrell paid $50,000 to retire bonds with a face value (and book value) of $50,000. c. On July 2, 2016, Farrell purchased equipment for $63,000 cash.
f. On December 31,2016, land with a fair market value of $150,000 was purchased through the issuance of a long-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31,2018.
g. Deferred taxes payable represent temporary' differences relating to the use of accelerated depreciation methods for income tax reporting and the straight line method for financial statement reporting.
Required:
1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31,2016, based on the preceding information.
2. Prepare the statement of cash flows.

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Balance Sheets December 31 Increase 2016 2015 (Decrease) Assels Accounts receivable, net Inventories Investment in Hall Inc. at equity $225,000 180,000 $ 45,000 (10,000 118,000 295,000 549,000 73,000 350,000 305,000 43 1,000 60,000 200,000 606,000 107,000) 20,000 13,000 150,000 18,000 32,000 Plant and equipmen less: Accumulated depreciation Patent (139,000) 16,000 4,000 Totd Asseis liabilifies and Shareholders Equity Accounis payable and accrued expenses Ncte payable, long-term Bonds payoble Delerred laxes puyuble Common stock, $10 par Additional paid-in capital Retained eamings Treasury slock, ot cosl Totd Liabilities ond Shareholders Equity $604,000 563,000 $ 41,000 150,000 (50,000] 11,000 10,000 21,000 98,000 17,000 150,000 160,000 210000 30,000 400,000 175,000 334,000 41,000 410,000 196,000 432,000 17,0 $1,993,000 1,695,000 Statoment of Income and Rotained Earnings For the Year Ended December 31, 2016 Net sales Operating expen ses $1,950,000 Cost of sales Selling and odministrative expenses Deprecialion $1,150,000 505,000 53,000 708,000 242,000 Operating income Other (income) expense Interest expense Equity in net income of Hall Inc loss on sale of equipmen Amortization of patent 15,000 (13,000) 5,000 4,000 Income before income taxes Income taxes 231,000 Current Deferred 79 11,000 90,000 Provision for income taxes Net income Reloined eamings, January 1, 2016 334,000 475,000 3,000 432,000 Cash dividonds, paid August 13, 2016 Relained eamings, December 31, 2016