The following are comparative balance sheets and an income statement for the Cupcake Company.
Cupcake Company
Balance Sheets
As of December 31
                                                                           2016                   2015
Assets:
Cash                                                                $25,000       $100,000
Accounts receivable                                        163,500       125,000
Inventory                                                          183,000       220,000
Property, Plant and Equipment                            70,000 50,000
Less: Accumulated Depreciation                      (40,000)       (35,000)
Long-term investments                                        20,000          65,000
Valuation Allowance – LT Investments                4,000 2,000
Totals                                                                $425,500       $527,000

Liabilities and shareholders’ equity:
Accounts payable - Merchandise                      $ 60,000    $110,000
Operating expenses payable                               29,500             25,000
Notes Payable                                                    10,000    -0-
Bonds payable                                                    60,000       110,000
Common stock                                                    150,000       125,000
Treasury Stock, Common                                  (10,000)          -0-
Retained earnings                                              122,000          155,000
Accumulated Other Comprehensive Income       4,000 2,000
Totals                                                                $425,500          $527,000

Cupcake Company
Income Statement
For the Year Ended December 31, 2016
Sales $571,000
Cost of Goods sold 372,500
Gross Profit $198,500
Operating expenses (excluding depreciation expense) 182,000
Depreciation expense       5,000
Income from operations $ 11,500
Other expenses:
Loss on sale of long-term investment (4,500)
Net Income 7,000
Other comprehensive Income – Unrealized holding gains 2,000
Comprehensive Income $ 9,000

Additional Information 2016:
• Cash dividends were declared and paid in 2016.
• No stock dividends were declared or issued in 2016
• No Property, Plant or Equipment was sold in 2016
• During 2016, Property, Plant and Equipment of $10,000 was acquired by signing a $10,000 Notes Payable on the day of acquisition. All other acquisitions were paid with cash
• The following were purchased/sold using/receiving cash: Treasury Stock and Long-term investments
• Any change in Bonds Payable relates to repayment of principle (face) amounts.
• All sales of Common Stock (No par value) were for cash
Prepare the Statement of Cash Flows of Cupcake Company for the year ended December 31, 2016.
A. Prepare a Statement of Cash Flows (direct method) using the “Spreadsheet Approach” we demonstrated in class.
B. Using your spreadsheet from A above prepare a Statement of Cash Flows, in good form, for the year ended December 31, 2016 (A reconciliation schedule is not required.)
C. Submit both A and B electronically in Canvas using separate tabs for each.

The following are comparative balance sheets and an income statemen...