Following are the data for Larson Co. for the year ending December 31 Year 2, and the preceding year ended December 31 Year 1 and the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that: Equipment costing $125,000 was purchased for cash. Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000. The stock was issued for cash. The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000. 1 Year 2 Year 1 2 Assets 3 Cash $100,000.00 $78,000.00 4 Accounts receivable (net) 78,000.00 85,000.00 5 Inventories 101,500.00 90,000.00 6 Equipment 410,000.00 370,000.00 7 Accumulated depreciation (150,000.00) (158,000.00) 8 Total Assets $539,500.00 $465,000.00 9 Liabilities and stockholders equity 10 Accounts payable (merchandise creditors) $58,500.00 $55,000.00 11 Cash dividends payable 5,000.00 4,000.00 12 Common stock, $10 par 200,000.00 170,000.00 13 Paid-in capital in excess of parcommon stock 62,000.00 60,000.00 14 Retained earnings 214,000.00 176,000.00 15 Total liabilities and stockholders equity $539,500.00 $465,000.00