Exercise 12-4 Prepare a Statement of Cash Flows [L012-1, L012-2] The following changes took place last year in Pavolik Company's balance sheet accounts: Asset and Contra-Asset Accounts Liabilities and Equity Accounts 10 D Accounts payable 32 I Cash 14 l Accrued liabilities 14 D Accounts receivable 38 D ncome taxes payable 19 I Inventory 9 Bonds payable 124 Prepaid expenses 11 D Common stock 56 D Long-term investments Property, plant, and equipment 245 I Retained earnings 52 I 52 I Accumulated depreciation D Decrease l Increase Long-term investments that had cost the company $11 were sold during the year for $26, and land that had cost $25 was sold for $14. In addition, the company declared and paid $8 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: 720 Sales Cost of goods sold 306 Gross margin 414 Selling and administrative expenses 320 Net operating income 94 Nonoperating items: (11) Loss on sale of land Gain on sale of investment 15 Income before taxes 98 Income taxes 38 60 Net income The company's beginning cash balance was $108 and its ending balance was $98