On the basis of the following data for Larson Co. for the year ending December 31 Year 2, and the preceding year ended December 31 Year 1, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that:

The Investments were sold for $210,000 cash. Equipment and Land were acquired for cash. The common stock was issued for cash. There were no disposals of equipment during the year Depreciation expense was $120,000 . Cash dividends paid $102,000 The common stock was issued for cash Net income is $600,000 There was a credit of $600,000 to retained earnings for net income There was a debit of 108,000 to Retained Earnings for cash dividend declared .

Cash: year 2: 186,000; year 1: 180,000

accounts receivable (net): year 2: 540,000; year 1: 480,000

investments: year 2: 0; year 1: 120,000

inventories: year 2: 924,000; year 1: 900,000

land: year 2: 600,000; year 1: 0

equipment: year 2: `1,680,000; year 1: 1,440,000

accumulated depreciation: year 2: (720,000); year 1:(600,000)

year 2: $3,210,000 year 1: $2,520,000

accounts payable(merchandise creditors): year 2: 408,000 year 1: 360,000

accrued expenses payable: year 2: 54,000; year 1: 60,000

cash dividends payable: year 2: 36,000; year 1: 30,000

common stock, $4 par: year 2: 840,000; year 1: 720,000

paid-in capital in excess of par--common stock: year 2: 240,000; year 1: 210,000

retained earnings: year 2: 1,632,000; year 1: 1,140,000

year 2: $3,210,000 year 1: $2,520,000