Comparative balance sheet accounts of Novak Inc. are presented below. NOVAK INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash: $42,200 $33,600 Accounts Receivable 70,700 59,500 Inventory 29,700 24,200 Equity investments 22,300 38,900 Machinery 30,100 18,800 Buildings 67,800 56,500 Land 7,500 7,500 $270,300 $239,000 Credit Accounts Allowance for Doubtful Accounts $2,300 $1,500 Accumulated Depreciation-Machinery 5,700 2,300 Accumulated Depreciation-Buildings 13,600 9,000 Accounts Payable 34,900 24,700 Accrued Payables 3,300 2,600 Long-Term Notes Payable 21,000 31,200 Common Stock, no-par 150,000 125,000 Retained Earnings 39.500 42,700 $270,300 $239,000 Additional data (ignoring taxes): 1. Net income for the year was $42,700. 2. Cash dividends declared and paid during the year were $20,900. 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 $24,800 were sold during the year for $28,500. No unrealized gains and losses were recorded on these investments in 2020. 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Novak's 2020 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,750 depreciation and $4,968 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $543,900 382,500 161,400 121,600 39,800 $3,700 (800) 2,900 $42,700 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (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 e.g.-15,000 or in parenthesis eg. (15,000).) NOVAK INC. Statement of Cash Flows (Indirect Method) Adjustments to reconcile net income to