Comparative balance sheet accounts of Pearl Inc. are presented below. Pearl Inc. Comparative Balance Sheet Accounts As of December 31, 2025 and 2024 December 31 2025 2024 Debit Accounts Cash $42,300 $34,000 Accounts Receivable 70,600 59,600 Inventory 30,000 23,900 Equity Investments 22,500 38,700 Machinery 29,700 18,600 Buildings 67,900 56,600 Land 7,500 7,500 $270,500 $238,900 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation-Machinery 5,700 2,300 Accumulated Depreciation-Buildings 13,600 8,900 Accounts Payable 34,800 24,500 Accrued Payables 3,300 2,700 Long-Term Notes Payable 21,200 31,200 Common Stock, no-par 150,000 125,000 Retained Earnings 39,700 42,800 $270,500 $238,900 Additional data (ignoring taxes): 1. Net income for the year was $43,100. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. 5. Equity investments (level of ownership is less than 20%) that cost $25,000 were sold during the year for $28,700. No unrealized gains and losses were recorded on these investments in 2025. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Pearl's 2025 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,850 depreciation and $5,733 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $544,200 383,000 161,200 121,000 40,200 $3,700 (800) 2,900 $43,100 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities $ (b) ra-sign e.g.-15,000 Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a-s or in parenthesis e.g. (15,000).) PEARL INC. Statement of Cash Flows Adjustments to reconcile net income to (Indirect Method) 69 Adjustments to reconcile net income to +A > > > > > >