Use the McKnight, Inc. data from Problem P16-34A.
Problem P16-34A
The 2016 income statement and comparative balance sheet of McKnight, Inc. follow:

Additionally, McKnight purchased land of $27,800 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 $10,200. The plant acquisition was 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?

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MCKNIGHT, INC. Income Statement Year Ended December 31, 2016 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: 441,000 202,200 238,800 Salaries Expense Depreciation Expense-Plant Assets Other Operating Expenses Total Operating Expenses 76,400 14,200 10,500 101,100 137,700 Operating Income Other Revenues and (Expenses): Interest Revenue Interest Expense Total Other Revenues and (Expenses) 8,800 (21,600) Net Income Before Income Taxes Income Tax Expense Net Income (12,800) 124,900 19,500 S 105,400 MCKNIGHT, INC. Comparative Balance Sheet December 31, 2016 and 2015 2016 2015 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory s 26,400 15,100 25,200 91,600 26,700 79,700 Long-term Assets: Plant Assets Accumulated Depreciation-Plant Assets Land 118,510 (19,610) 34,800 S 266,500 110,310 (15,610) 7,000 S 233,600 Total Assets Liabilities Current Liabilities: Accounts Payable Accrued Liabilities s 35,100 28,200 30,100 Long-term Liabilities: Notes Payable 73,000 106,000 Total Liabilities 136,300 166,600 Stockholders' Equity Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 88,100 42,100 130,200 S 266,500 64,700 2,300 67,000 $ 233,600