Asset and Contra-Asset Accounts Cash $ 28 D The following changes took place last year in Pavolik Company's balance sheet accounts: Liabilities and Stockholders' Equity Accounts Accounts payable Accounts receivable $ 32 I Accrued liabilities Inventory $ 74 D Income taxes payable Prepaid expenses $ 27 I Bonds payable Long-term investments $ 29 D Common stock Property, plant, and equipment Accumulated depreciation $ 515 I Retained earnings $ 86 I $ 32 D $ 37 I $ 268 I $ 128 D $ 106 I $ 106 I D= Decrease; I Increase. Long-term investments that cost the company $29 were sold during the year for $62 and land that cost $61 was sold for $32. In addition, the company declared and paid $26 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Pavolik did not retire any bonds during the year or issue any new common stock. The company's income statement for the year follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land Gain on sale of investments Income before taxes Income taxes Net income $1,260 558 702 500 202 $ (29) 33 4 206 74 $ 132 The company's beginning cash balance was $144 and its ending balance was $116. Required 1 Required 2 Use the indirect method to determine the net cash provided by operating activities for the year. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Pavolik Company Statement of Cash Flows (partial) Required 1 Required 2 > Prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.) Operating activities: Pavolik Company Statement of Cash Flows Investing activities: Financing activities: Beginning cash and cash equivalents Ending cash and cash equivalents < Required 1 Required 2 >