operating activities. OBJ.3 PR 16-5A The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows: Statement of cash flows-direct method applied to PR 16-1A om Dec. 31, 20Y3 Dec. 31, 20Y2 Assets s 155,000 150,000 Cash Accounts receivable (net) Inventories 450,000 770,000 0 500,000 1,400,000 (600,000) $2,675,000 750,000 100,000 Land 1,200,000 Accumulated depreciation-equipment $2,100,000 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable 340.0000 30000 50,000 25,000 600,000 175,000 950,000 $2,100,000 30,000 Paid-in capital: Excess of issue price over par-common stock.... 200,000 1,360,000 $2,675,000 Total liabilities and stockholders' equity The income statement for the year ended December 31, 20Y3, is as follows: Cost of merchandise sold Gross profit Operating expenses: $3,000,000 1400,000 $1,600,000 Depreciation expense Other operating expenses 100,000 950,000 Total operating expenses Operating income Other income: 1,050,000 $ 550,000 Income before income tax Income tax expense Net income 75,000 625,000 125,000 $500,000 Chapter 16 Statement of Cash Flows 813 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $175,000 cash. b. Equipment and land were acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $90,000 debit to Retained Earnings for cash dividends declared. Instructions Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities