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The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows: SHOW ME HOW EXCEL TEMPLATE GENERAL LEDGER Dec 31, 2016 Dec 31, 2015 + Assets Cash Accounts receivable (net) Inventories Investments ... Land Equipment. Accumulated depreciation. Total assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable $ 643,400 566,800 1,011,000 0 520,000 880,000 (244,400) $3,376,800 $ 679,400 547,400 982,800 240,000 0 680,000 (200,400) $2,929,200 $ 771,800 63.400 8,800 $ 748,400 70.800 6,400

Answer 1

Preparation of the statement of cash flows, using the direct method of presenting cash flows from operating activities:

CANACE PRODUCTS INC.
Statement of Cash Flows
For the Year Ended December 31, 20Y6
Cash flows from operating activities:
	Cash received from customers				$ 5,960,600
	Deduct:	Cash payments for merchandise		$ (2,456,800)
		Cash payments for operating expenses		(3,107,400)
		Cash payments for income taxes		(102,800)		(5,667,000)
	Net cash flow from operating activities						$ 293,600
Cash flows from investing activities:
	Cash received from sale of investments				$ 176,000
	Less:	Cash paid for purchase of land		$ (520,000)
		Cash paid for purchase of equipment		(200,000)		(720,000)
	Net cash flow used for investing activities						(544,000)
Cash flows from financing activities:
	Cash received from sale of common stock				$ 240,000
	Less:	Cash paid for dividends				(25,600)
	Net cash flow from financing activities						214,400
Decrease in cash							$ (36,000)
Cash at the beginning of the year							679,400
Cash at the end of the year							$ 643,400
Schedule Reconciling Net Income with Cash Flows from Operating Activities:
Net income								$ 217,200
Adjustments to reconcile net income to net cash flow from operating activities:
	Depreciation expense							44,000
	Loss on sale of investments							64,000
Changes in current operating assets and liabilities:
	Increase in accounts receivable						(19,400)
	Increase in inventories						(28,200)
	Increase in accounts payable						23,400
	Decrease in accrued expenses payable						(7,400)
Net cash flow from operating activities						$ 293,600
Computations:
1.	Sales				$ 5,980,000
	Deduct increase in accounts receivable		19,400
	Cash received from customers		$ 5,960,600
2.	Cost of merchandise sold			$ 2,452,000
	Add increase in inventories		28,200
	Subtotal			$ 2,480,200
	Deduct increase in accounts payable		23,400
	Cash payments for merchandise		$ 2,456,800
3.	Operating expenses other than depreciation		$ 3,100,000
	Add decrease in accrued expenses payable		7,400
	Cash payments for operating expenses		$ 3,107,400