Selected financial statement information and additional data for abc co. is presented below. prepare a statement of cash flows for the year ending december 31, 2016 december 31 2015 2016cash $40,000 $ ? accounts receivable (net) 84,000 144,200inventory 168,000 201,600land 58,800 16,000equipment 504,000 789,600total $854,800 $1,224,400accumulated depreciation $84,000 $115,600accounts payable 50,400 86,000notes payable - short-term 67,200 29,400notes payable - long-term 168,000 302,400common stock 420,000 487,200retained earnings 65,200 203,800total $854,800 $1,224,400additional data for 2016: 1. net income was $240,200.2. depreciation was $31,600.3. land was sold at its original cost.4. dividends of $101,600 were paid.5. equipment was purchased for $84,000 cash.6. a long-term note for $201,600 was used to pay for an equipment purchase.7. common stock was issued to pay a $67,200 long-term note payable. instructions: (1) net cash provided (used) by operating activities(2) net cash provided (used) by investing activities

1.   $175,800

2.  -$41,200

Explanation:

The preparation of the Cash Flows from Operating Activities and investing activities —Indirect Method are shown below:

1. Cash flow from Operating activities - Indirect method

Net income $240,200

Adjustment made:

Add : Depreciation expense $31,600

Less: Increase in accounts receivable -$60,200 ($144,200 - $84,000)

Less: Increase in inventory -$33,600 ($201,600 - $168,000)

Add: Increase in accounts payable $35,600 ($86,000 - $50,400)

Less: Decrease in short term notes payable -$37,800 ($29,400 - $67,200)

Total of Adjustments - $64,400

Net Cash flow from Operating activities                         $175,800

2. Cash flow from Financing activities

Add: Sale of land  $42,800 ($58,800 - $16,000)

Less: Purchase of equipment - $84,000

Net Cash flow from Financing activities                             -$41,200

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explanation:

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