The comparative balance sheets and an income statement for Fanning Corporation follow:Balance SheetsAs of December 31Year 2AssetsCashAccounts receivableMerchandiseinventoryPrepaid rentEquipmentAccumulateddepreciationLandTotal assetsLiabilitiesAccounts payable(inventory)Salaries payableStockholders' equityCommon stock, $50par valueRetained earningsTotal liabilities andequitySalesCost of goods soldGross profitOperating expensesDepreciation expenseRent expenseSalaries expenseOther operatingexpensesNet income$ 83,09231,936Other Information156, 1922,415252, 080(151,200)190, 830$ 565,345$63,43826,483$Year 1Income StatementFor the Year Ended December 31, Year2171,8104,830287,650(236, 720)78,030$ 369,660FANNING40, 64023, 420251,500198,500223,92476,500$ 565,345 $369,660$1,504,000(799,326)704,67471,96022,700(24,150)(23, 190)(254,410)(255,500)$ 147,4241. Purchased land for $112,800.2. Purchased new equipment for $96,100.3. Sold old equipment that cost $131,670 with accumulated depreciation of $109,670 for $22,000 cash.4. Issued common stock for $53,000.RequiredPrepare the statement of cash flows for 2017 using the indirect method. (Amounts to be deducted and cash outflowsshould be indicated by a minus sign.)ORPORATION RequiredPrepare the statement of cash flows for 2017 using the indirect method. (Amounts to be deducted and cash outflowsshould be indicated by a minus sign.)FANNING CORPORATIONStatement of Cash FlowsFor the Year Ended December 31, Year 2Cash flows from operating activities:Add: Decrease in current assets and Increases incurrent liabilities:Less: Increases in current assets and Decreases incurrent liabilities:Plus: Noncash chargesCash flows from investing activities:Cash flows from financing activities:Ending cash balance$$00000

The cash flow statement records all cash inflows and outflows during the financial year. It includes three activities. a) Cash flow from operating activities; b) Cash flow from investing activities; and c) Cash flow from financing activities.Fanning Corporation Statement of cash flows For the year ended December 31, Year 2 Cash flows from operating activities Net Income $ 147,424 Add: Decrease in current assets and increase in current liabilities Inventory $171,810 - $156,192 $ 15,618 Prepaid rent $4,830 - $2,415 $ 2,415 Salaries payable $26,438 - $22,700 $ 3,783 Total $ 21,816 Less: Increase in current assets and decreases in current liabilities Account receivable $31,936 - $23,420 $ 8,516 Account payable $71,960 - $63,438 $ 8,522 Total $ (17,038) Plus: Non-cash charges Depreciation $ 24,150 Total $ 24,150 A. Net cash flow from operating activities $ 176,352 Cash flows from investing activities: Purchase land $ (112,800) Net equipment $ (96,100) Proceed from equipment $ 22,000 B. Net cash flow from investing activity $ (186,900) Cash flows from financing activities: Common stock $ 53,000 C. Net cash flow from financing activities $ 53,000 Net cash from all the activities (A+B+C) $ 42,452 Add: Cash, Dec 31, Year 1 $ 40,640 Ending cash balance $ 83,092