from PR 16-4A Statement of cash flows-direct method ities, is as follows: The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, OBJ. 3 Dec. 31, 2016 Cash Assets Dec. 31, 2015 Accounts receivable (net) ..... $ 643,400 $ 679,400 Inventories ... 566,800 547,400 Investments . . 1,011,000 982,800 Land ... 240,000 Equipment. ... 520,000 Accumulated depreciation ..... 880,000 680,000 Total assets (244,400) (200,400) $3,376,800 $2,929,200 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 771,800 $ 748,400 Accrued expenses payable (operating expenses) Dividends payable. .. . . . . . 63,400 70,800 . . . . . 8,800 6,400 Common stock, $2 par . . .... 56,000 32,000 Paid-in capital: Excess of issue price over par-common stock ..... 408,000 192,000 Retained earnings . ... 2,068,800 1,879,600 Total liabilities and stockholders' equity . ... $3,376,800 $2,929,200 The income statement for the year ended December 31, 2016, is as follows: Sales $5,980,000 Cost of merchandise sold 2,452,000 Gross profit . ... $3,528,000 Operating expenses: Depreciation expense 44,000 Other operating expenses 3,100,000 3,144,000 Total operating expenses .... . $ 384,000 Operating income . . . Other expense: 64,000) Loss on sale of investments . $ 320,000 Income before income tax . ..... 102,800 . . . . . Income tax expense . $ 217,200 Net income .. . Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows: a. Equipment and land were acquired for cash. ere were no disposals of equipment during the year. (Continued)