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David Clancy Associates closed its books for the current year. The firm provided the following comparative balance sheets and income statement. E: (Click the icon to view the balance sheets.) (Click the icon to view the income statement.) The company sold its indefinite-life intangible assets at their carrying value. Cash was used to acquire land. The debt investments were purchased on December 31. Requirement Prepare the company's cash flow statement for the current year under the direct method. Present any required disclosures. Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use a minus sign or parentheses for any numbers to be subtracted and/or net cash used by activities. If an input field is not used in the statement, leave the field empty; do not select a label or enter a zero.) Michael Hart Associates Statement of Cash Flows (Direct Method) For the Year Ended December 31 Operating Activities: Amount Net Cash Provided (Used) by Operating Activities - Balance Sheet David Clancy Associates Balance Sheets At December 31 Assets Ending Beginning 18,400 $ 40,400 Current Assets Cash Held-to-Maturity Debt Investments Accounts Receivable - net 30,700 0 24,950 27,281 Merchandise Inventory 46,700 36,200 14,200 Prepaid Expenses 24,800 $ 145,550 $ 118,081 Total Current Assets Noncurrent Assets Land 935,318 $ 762,837 Property, Plant, and Equipment 1,689,632 1,689,632 - Balance Sheet Accumulated Depreciation (342,900) 0 (320,100) 23,250 Indefinite-Life Intangible Assets $ Total Noncurrent Assets 2,282,050 $ 2,155,619 $ 2,427,600 $ 2,273,700 Total Assets Liabilities Current Liabilities $ 74,100 $ 39,600 Accounts Payable Dividends Payable 0 22,500 17,500 Income Taxes Payable 9,500 $ 114,100 $ 49,100 Total Current Liabilities Noncurrent Liabilities Notes Payable $ 107,300 $ 453,800 $ Total Noncurrent Liabilities 107,300 $ 453,800 - X Balance Sheet $ 114,100 $ 49,100 Total Current Liabilities Noncurrent Liabilities $ 107,300 $ 453,800 Notes Payable Total Noncurrent Liabilities $ 107,300 $ 453,800 $ 221,400 $ 502,900 Total Liabilities $ 685,700 $ 500,800 Shareholders' Equity Common Stock, $1 par value Additional Paid-in Capital in Excess of Par - Common Additional Paid-in Capital - Stock Options 927,600 770,800 0 37,600 555,300 Retained Earnings 499,200 Total Shareholders' Equity $ 2,206,200 $ 1,770,800 $ Total Liabilities and Shareholders' Equity 2,427,600 $ 2,273,700 Income Statement David Clancy Associates Income Statement For the Current Year Ended December 31 Sales $ 795,700 477,100 Cost of Goods Sold $ Gross Profit 318,600 83,800 Selling, General, and Administrative Expenses $ Bad Debt Expense 7,500 22,800 Depreciation Expense $ Total Operating Expenses 114,100 $ Operating Income 204,500 Interest Expense $ (7,850) 1,600 Interest Income - x Income Statement Sales $ 795,700 477,100 Cost of Goods Sold $ Gross Profit 318,600 Selling, General, and Administrative Expenses $ 83,800 Bad Debt Expense 7,500 22,800 Depreciation Expense $ Total Operating Expenses 114,100 $ Operating Income 204,500 Interest Expense (7,850) 1,600 Interest Income Income before Tax $ 198,250 (78,650) Income Tax Expense $ 119,600 Net Income