A comparative balance sheet for Lomax Company containing data for the last two years is as follows: Lomax Company Comparative Balance Sheet This Year Last Year $ 84,000 $ 60,400 616,000 642,500 623,600 433,000 20,400 11,500 1,344,000 1,147, 400 2,435,000 1,852,000 630, 600 571,700 1,804,400 1,280, 300 107,300 169,000 133,000 76,500 $3,388,700 $2,673,200 Assets Current assets: Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Long-term investments Loans to subsidiaries Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 890,800 $ 583,000 32,800 53,700 149,900 128,400 1,073,500 765, 100 685,000 439,000 1,758,500 1,204,100 1,116,000 1,013,000 514,200 456,100 1,630,200 1,469,100 $3,388,700 $2,673,200 The following additional information is available about the company's activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $393,000 were repaid during this year. c. Equipment was sold during this year for $76,500. The equipment had cost $156,000 and had $55,600 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $136,000. These investments had cost $61,700 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Lomax did not repurchase any of its own stock during the year. The company reported net income this year as follows: $3,260,000 2,021,200 1,238,800 998,900 239,900 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income $ 74,300 (23,900) 50,400 290, 300 93,000 197,300 $ Required: Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash outflows as negative amounts.) $ 197,300 $ Operating activities: Net income Adjustments to convert net income to a cash basis: Depreciation Decrease in accounts receivable Increase in inventory Increase in prepaid expenses Increase in accounts payable Decrease in accrued liabilities 110,300 26,500 (190,600) (8,900) 307,800 (20,900) 21,500 (74,300) 23,900 Increase in income taxes payable Gain on sale of investments Loss on sale of equipment 195,300 392,600 Net cash provided by operating activities Investing activities: Additions to property, plant, and equipment Proceeds from sale of equipment Proceeds from sale of long-term investments Loan to subsidiaries 76,500 136,000 (56,500) 156,000 Net cash used in investing activities Financing activities