Granger Inc. Comparative Balance Sheets December 31 Assets 2017 2016
Cash $80,800 $48,400
Accounts receivable 87,800 38,000
Inventory 112,500 102,850
Prepaid expenses 28,400 26,000
Long-term investments 138,000 109,000
Plant assets 285,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750

Liabilities and Stockholders' Equity
Accounts payable $102,000 $67,300
Accrued expenses payable 16,500 21,000
Bonds payable 110,000 146,000
Common stock 220,000 175,000
Retained earnings 234,000 105,450
Total $682,500 $514,750

Granger Inc. Income Statement Data For the Year Ended December 31, 2017

Sales revenue $388,460

Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income tax expense 27,280
Interest expense 4,730
Loss on disposal of plant assets 7,500 233,880
Net income $154,580

Additional information:

1. New plant assets costing $90,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $51,750 and accumulated depreciation of $43,650 were sold for $1,350 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $23,427 was declared and paid during the year.

Required:
Prepare a statement of cash flows for Granger Inc. using the direct method.

                                       GRANGER INC.

       STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)

                  FOR THE YEAR ENDED DECEMBER 31, 2017

                Particulars                                                    Amount$

Cash flow from operating activities

Net Income                                                                    154,580

Adjustments to reconcile net income to net cash

provided by operating activities  

Adjustment for non cash effects

Depreciation expense                                                   46,500

Loss on sale of plant assets                                           7,500

Change in operating assets & liabilities

Increase in Accounts receivable                                  -49,800

Increase in inventory                                                      -9,650

Increase in prepaid expenses                                        -2,400

Increase in accounts payable                                         34,700

Decrease in accrued expenses payable                       -4,500

Net cash flow from operating activities (a)                 176,930

Cash Flow from Investing activities

Old Plant assets sold                                                       1,350

New plant assets purchased                                         -90,000

Long-term investments purchased                                -29,000

Net cash Flow from Investing activities (b)                -117,650

Cash Flow from Financing activities

Cash dividends paid                                                        -23,427

Common stock issued                                                      45,000

Bonds paid                                                                        -36,000

Net cash Flow from Financing activities (c)                 -14,427

Net Change in cash c=a+b+c                                            44,853

Add: Beginning cash balance                                           48,400

Closing cash balance                                                        93,253

a.