Please complete question 2.

2. value: 20.00 points Exercise 12-4 Prepare a statement of Cash Flows [LO12-1, LO12-2] The following changes took place last year in Pavolik Company's balance sheet accounts: Asset and Contra-Asset Accounts Liabilities and Equity Accounts Cash $ 5D Accounts payable $ 35 Accounts receivable $ 1101 Accrued liabilities $ 4 D Inventory $ 70 D Income taxes payable $ 81 Prepaid expenses $ 91 Bonds payable $ 150 Long-term investments $ 6 D Common stock $ 80 D Property, plant, and equipment $ 185 1 Retained earnings $ 541 Accumulated depreciation $ 601 D=Decrease; 1 = Increase Long-term investments that had cost the company $6 were sold during the year for $16 and land that had cost $15 was sold for $9. In addition, the company declared and paid $30 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: $ 700 400 300 184 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land Gain on sale of investments Income before taxes Income taxes 116 $(6) 10 4 120 36 Net income S 84 The company's beginning cash balance was $90 and its ending balance was $85. 2. Prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.) Answer is not complete. Pavolik Company Statement of Cash Flows - Indirect Method Operating activities: Net cash provided by operating activities Investing activities: Proceeds from sale of long-term investments s Proceeds from sale of land Additions to property, plant & equipment (200) IS 130 16 9 (175) 150 Financing Activities: Issuance of bonds payable Repurchase of common stock Cash dividends (80) (30) OO 40 (5) Net cash provided by financing activities Net decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents 90 S 85