Use the McDonald data from Problem P16-41B.
Problem P16-41B
The 2016 income statement and comparative balance sheet of McDonald, Inc. follow:

Additionally, McDonald purchased land of $20,500 by financing it 100% with long- term notes payable during 2016. During the year, there were no sales of land, no retirements of stock, and no treasury stock transactions. A plant asset was disposed of for $0. The cost and the accumulated depreciation of the disposed asset was $13,240. Plant asset was acquired for cash.
Requirements
1. Prepare the 2016 statement of cash flows by the direct method.
2. How will what you learned in this problem help you evaluate an investment?

MCDONALD, INC Income Statement Year Ended December 31, 2016 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: $443,000 203,200 239,800 Salaries Expense Depreciation Expense Plant Assets Other Operating Expenses Total Operating Expenses 78,400 14,800 10,300 103,500 136,300 Operating Income Other Revenues and (Expenses): Interest Revenue Interest Expense Total Other Revenues and (Expenses) 8,300 (21,800) Net Income Before Income Taxes Income Tax Expense Net Income (13,500) 122,800 19,200 S 103,600 MCDONALD, INC Comparative Balance Sheet December 31, 2016 and 2015 2016 2015 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory S 26,200 26,500 79,800 15,100 25,700 91,800 Long-term Assets: 117,240 (21,340) 34,500 109,480 Plant Assets Accumulated Depreciation-Plant Assets Land (19,780) 14,000 Total Assets S 262,900 236,300 Liabilities Current Liabilities: Accounts Payable Accrued Liabilities S 35,000 30,000 30,900 28,300 Long-term Liabilities Notes Payable 75,000 138,300 105,000 165,900 Total Liabilities Stockholders' Equity Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 88,800 35,800 124,600 S 262,900 64,300 6,100 70,400 236,300