Cash Accounts receivable Short-term debt investments (available-for-sale) Inventory Prepaid rent Larkspur Inc. Comparative Balance Sheet As of December 31, 2025 and 2024 Equipment Accumulated depreciation-equipment Copyrights Total assets 12/31/25 $5,900 62,000 34,700 39,700 4,900 154,300 (35,300) 45,600 12/31/24 $7,000 51,500 17,900 60,400 4,100 130,500 (25,200) 49,700 $311,800 $295,900

\begin{tabular}{lrr} Accounts payable & $46,200 & $40,400 \\ Income taxes payable & 4,000 & 6,000 \\ Salaries and wages payable & 8,100 & 3,900 \\ Short-term loans payable & 8,000 & 9,900 \\ Long-term loans payable & 60,200 & 69,300 \\ Common stock, \$10 par & 100,000 & 100,000 \\ Paid-in capital, common stock & 30,000 & 30,000 \\ Retained earnings & 55,300 & 36,400 \\ \hline Total liabilities and stockholders' equity & $311,800 & $295,900 \\ \hline \end{tabular} Larkspur Inc. Income Statement For the Year Ending December 31, 2025 \begin{tabular}{|c|c|c|} \hline Sales revenue & & $335,600 \\ \hline Cost of goods sold & & 174,600 \\ \hline Gross profit & & 161,000 \\ \hline Operating expenses & & 120,700 \\ \hline Operating income & & 40,300 \\ \hline Interest expense & $11,400 & \\ \hline Gain on sale of equipment & 2,100 & 9,300 \\ \hline Income before tax & & 31,000 \\ \hline Income tax expense & & 6,200 \\ \hline Net income & & $24,800 \\ \hline \end{tabular} \begin{tabular}{lrr} & \begin{tabular}{c} Larkspur Inc. \\ Comparative Balance Sheet \\ As of December 31, 2025 and 2024 \end{tabular} \\ & 12/31/25 & 12/31/24 \\ \hline Cash & $5,900 & $7,000 \\ Accounts receivable & 62,000 & 51,500 \\ Short-term debt investments (available-for-sale) & 34,700 & 17,900 \\ Inventory & 39,700 & 60,400 \\ Prepaid rent & 4,900 & 4,100 \\ Equipment & 154,300 & 130,500 \\ Accumulated depreciation-equipment & (35,300) & (25,200) \\ Copyrights & 45,600 & 49,700 \\ \hline Total assets & $311,800 & $295,900 \\ \hline \end{tabular} 1. Dividends in the amount of $5,900 were declared and paid during 2025. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2025. Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.) (Show amounts in the investing and financing sections that decrease cash flow with either a-sign es. 15,000 or in parenthesis es. (15,000)