Comparative balance sheet accounts of Larkspuma are presented below LARKSPUR INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $42.400 $82.500 Accounts Receivable 70.200 59.900 Inventory 29.700 24 100 Equity investments 22.500 9.100 Machinery 30.100 19.900 Buildings 67.000 55,700 Land 7.400 7.400 $269,300 $237500 Credit Accounts Allowance for Doubtful Accounts $2.200 $1,600 Accumulated Depreciation-Machinery 5.600 2.200 13,600 9.000 Accumulated Depreciation-Buildings 35.300 24.600 Accounts Payable 3,400 2.600 Accrued Payables 20.800 30.900 Long-Term Notes Payable 150.000 125.000 Common Stock, no-par 38.400 Retained Earnings 41.600 Accrued Payables 2400 2.800 Long-Term Notes Payable 20.000 30.900 Common Stock, no-par 1150.000 125.000 Retained Earnings 38 400 1800 $269 800 5287500 Additional data (ignoring taxes): 1. Net income for the year was $42.900 2. Cash dividends declared and paid during the year were $21,100. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. Equity investments (level of ownership is less than 20%) that cost $25.100 were sold during the year for $28,800. No unrealized gains and losses were recorded on these investments in 2020. 5. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2.250. Larkspur's 2020 income statement follows (ignoring taxes): $541 200 Sales revenue 380.200 Less: Cost of goods sold 161.000 Gross margin 121,000 Less: Operating expenses (includes $8,750 depreciation and $5,835 bad debts) 40,000 Income from operations $3,700 Other: Gain on sale of investments (800 2.900 Loss on sale of machinery $42.900 Net income Income from operations 40,000 Other: Gain on sale of investments $3700 Loss on sale of machinery (800) 2.900 Net income $42.900 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number es -45 or parentheses eg. (45).) Net cash flow from operating activities $ (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a sign eg. -15,000 on in parenthesis eg (15,000).) LARKSPUR INC. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to $ 5 KE Adjustments to reconcile net income to