Financial statement data for Gibbons Electronics Company for 2016 follow.

Additional information:
1. Equipment that cost $100,000 and had a net carrying amount of $40,000 was sold for $50,000.
2. Dividends were declared and paid during the year.
Required:
a. Prepare a statement of cash flows for Gibbons Electronic Company for the year ended December 31, 2016. Include supplementary information to disclose the amounts paid for interest and income taxes using the indirect method.
b. Determine the cash flows from operating activities using the direct method.

GIBBONS ELECTRONICS COMPANY Comparative Statement of Financial Position Dec. 31, 2016 Dec. 31, 2015 Assets Cash Accounts receivable Inventory Prepaid insurance S 285,000 334,000 311,000 50,000 980,000 650,000 (165,000) 485,000 S1 ,465,000 295,000 384,000 266,000 35,000 980,000 590,000 (130,000) 460,000 $1,440,000 Total current assets Property, plant, and equipment Accumulated depreciation Net capital assets Total assets Liabilities and shareholders' equity Accounts payable Wages payable Unearned revenue Income taxes payable 60,000 15,000 50,000 55,000 180,000 490,000 670,000 350,000 445,000 795,000 S1,465,000 S 50,000 10,000 35,000 45,000 140,000 575,000 715,000 285,000 440,000 725,000 $1,440,000 Total current liabilities Bonds payable Total liabilities Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders equity GIBBONS ELECTRONICS COMPANY Statement of Income For the year ended December 31, 2016 Sales revenue S 3,855,000 10,000 3.865.000 Gain on sale of equipment Expenses Cost of goods sold Wages expense Depreciation expense Other operating expenses Interest expense Income taxes Total expenses 2,105,000 353,000 95,000 555,000 60,000 345,000 3,513,000 352,000 Net income