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

.	Year 2	Year 1
Cash	$186,000	$ 180,000
Accounts receivable (net)	540,000	480,000
Investments	0	120,000
Inventories	924,000	900,000
Land	600,000	0
Equipment	1,680.000	1,440,000
Accumulated depreciation	(720,000)	(600,000)
	$3,210,000	$2,520,000
Accounts payable (merchandise creditors)	$ 408,000	$ 360,000
Accrued expenses payable	54,000	60,000
Cash dividends payable	36,000	30,000
Common stock, $4 par	840,000	720,000
Paid-in capital in excess of parcommon stock	240,000	210,000
Retained earnings	1,632,000	1,140,000
	$3,210,000	$2,520,000