PLEASE ANSWER WITH EXPLANATION.

Preparing a Statement of Cash Flows (Indirect Method) The following financial statements were issued by Hoskins Corporation for the fiscal year ended December 31, 2016. All amounts are in millions of U.S. dollars. Balance Sheets December 31, 2015 December 31, 2016 Assets Cash $600 $1,100 Accounts Receivable 1200 3,000 Inventory 800 1,000 Prepaid Expenses 800 300 Current Assets 3,400 5,400 Property, Plant and Equipment at Cost 12,400 12,200 Less Accumulated Depreciation (4,200) (3,500) Property, plant and Equipment, Net 8,200 8,700 Total Assets $11,600 $14,100 Liabilities and Shareholders' Equity Accounts Payable $800 $1,600 Income Tax Payable 400 200 Short-Term Debt 2,400 5,400 Current Liabilities 3,600 7,200 Long-Term Debt 2,000 0 Total Liabilities 5,600 7,200 Contributed Capital 1,600 1,600 Retained Earnings 4,400 5,300 Total Shareholders' Equity 6,000 6,900 Total Liabilities and Shareholders' Equity $11,600 $14,100 Income Statement Fiscal year 2016 $13,000 6,800 6,200 Sales Revenues Cost of Goods Sold Gross Profit Selling, General and Administrative Expenses Depreciation Expense Operating Income Interest Expense Income Before Income Tax Expense Income Tax Expense 2,900 700 2,600 700 1,900 500 $1,400 Net Income Additional information: 1. During fiscal year 2016, Hoskins Corporation acquired new equipment for $2,400 in cash. In addition, the company disposed of used equipment that had original cost of $2,600 and accumulated depreciation of $1,400, receiving $1,200 in cash from the buyer. 2. During fiscal year 2016, Hoskins Corporation arranged short-term bank financing and borrowed $3,000, using a portion of the cash to repay all of its outstanding long-term debt. 3. During fiscal year 2016, Hoskins Corporation engaged in no transactions involving its common stock, though it did declare and pay in cash a common stock dividend of $500. Prepare a statement of cash flows (all three sections) for Hoskins Corporation's fiscal year 2016, using the indirect method for the cash from operations section. Note: Use a negative sign with your answer to indicate a reduction in cash/cash outflow. HOSKINS CORPORATION STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2016 Cash flows from Operations: Net income $ 1,900 X Adjustments: Depreciation 700 Change in accounts receivable (1,800) Change in inventory (200) Change in prepaid expenses Change in accounts payable Change in income taxes payable Cash Flows from Operating Activities 1,900 X Cash Flows from Investing: Change in income taxes payable . Proceeds from disposal of equipment Cash Flows from Investing Activities Cash Flows from Financing 500 800 X $ X X X X X X X Increase in short-term debt Decrease in long-term debt Cash Flows from Financing Activities Net change in cash Change in income taxes payable Ending cash balance X X X X $ X