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Statement of cash flowsdirect method

The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is as follows:

1		Dec. 31, 2016	Dec. 31, 2015
2	Assets
3	Cash	$625,760.00	$585,920.00
4	Accounts receivable (net)	227,840.00	208,960.00
5	Inventories	641,760.00	617,120.00
6	Investments	0.00	240,000.00
7	Land	328,000.00	0.00
8	Equipment	705,120.00	553,120.00
9	Accumulated depreciation-equipment	(166,400.00)	(148,000.00)
10	Total assets	$2,362,080.00	$2,057,120.00
11	Liabilities and Stockholders Equity
12	Accounts payable (merchandise creditors)	$424,480.00	$404,960.00
13	Accrued expenses payable (operating expenses)	42,240.00	52,640.00
14	Dividends payable	24,000.00	19,200.00
15	Common stock, $2 par	150,000.00	100,000.00
16	Paid-in capital: Excess of issue price over parcommon stock	417,500.00	280,000.00
17	Retained earnings	1,303,860.00	1,200,320.00
18	Total liabilities and stockholders equity	$2,362,080.00	$2,057,120.00

The income statement for the year ended December 31, 2016, is as follows:

1	Sales		$5,372,559.00
2	Cost of merchandise sold		?3,306,190.00
3	Gross profit		$2,066,369.00
4	Operating expenses:
5	Depreciation expense	$18,400.00
6	Other operating expenses	1,755,402.00
7	Total operating expenses		1,773,802.00
8	Operating income		$292,567.00
9	Other income:
10	Gain on sale of investments		40,000.00
11	Income before income tax		$332,567.00
12	Income tax expense		133,027.00
13	Net income		$199,540.00

Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows:

A.	The investments were sold for $280,000 cash.
B.	Equipment and purchase of land were acquired for cash.
C.	There were no disposals of equipment during the year.
D.	The common stock was issued for cash.
E.	There was a $96,000 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.

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