Appendix 2 PR 13-4A Statement of cash flows-direct method m The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is o as follows: Dec. 31, 20Y6 Dec. 31, 20Y5 Assets 643,400 679,400 Cash. Accounts receivable (net) Inventories Investments Land 547,400 982,800 240,000 1,011,000 520,000 880,000 Accumulated depreciation. Total assets 680,000 (244.400)(200.400) $2,929,200 $3,376,800 Liabilities and Stockholders'Equity Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) 5 748,400 70,800 6,400 32,000 192,000 1,879,600 . 771,800 63,400 8,800 56,000 408,000 068,800 Common stock, $2 par. Paid-in capital: Excess of issue price over par-common stock Retained earnings Total liabilities and stockholders' equity.... $3,376.800 The income statement for the year ended December 31, 20Y6, is as follows: Sales $5,980,000 2,452,000 $3,528,000 Gross profit... Operating expenses: Depreciation expense Other operating expenses.... 44,000 3,100,000 Total operating expenses 3,144,000 $ 384,000 Other expense Income before income tax Income tax expense Net income (64,000) 320,000 102,800 217,200 . . . Additional data obtained from an examination of the accounts in the ledger for 20Y6 are s follows: Equipment and land were acquired for cash. There were no disposals of equipment during the year. (Continued)