Statement of Cash Flows (Direct Method) The Towne Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 follow: TOWNE COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash Accounts Receivable Interest Receivable Prepaid Expenses \begin{tabular}{|r|r|} \hline$51,600 & $43,200 \\ \hline 15,600 & 21,600 \\ \hline & 4,800 \\ \hline 19,200 & 9,600 \\ \hline & 84,000 \\ \hline 835,200 & 786,000 \\ \hline(280,800) & (222,000) \\ \hline 109,200 & 34,800 \\ \hline$750,000 & $774,000 \\ \hline \end{tabular} Long-term Investments-available for Sale Fair Value Adjustment to Investments Plant Assets Accumulated Depreciation Franchise Total Assets Liabilities and Stockholders' Equity Accrued Liabilities Notes Payable Common Stock (\$10 par value) Retained Earnings Unrealized Gain on Investments Treasury Stock Total Liabilities and Stockholders' Equity \begin{tabular}{|r|r|} \hline$14,400 & $16,800 \\ \hline 714,000 & 32,400 \\ \hline 45,600 & 642,000 \\ \hline & 70,800 \\ \hline(24,000) & 12,000 \\ \hline$750,000 & $774,000 \\ \hline \end{tabular} During the year, the following transactions occurred: 1. Sold equipment for $10800 cash that originaly cos182.800 and hads 37,600 accumuated deprecation. 2. sold foneterm fiyestiments that had cost 4 4, 400 for 5104,400 cath Unrealized gains totaling 512,000 relited to theie mweitments had been recorded in elarier years. At yearend, the fair value adjustment and unreailied gain account balances were eliminated. 3. Paid cash to extend the companys erchusive franctise for another three yeors. A. Raid off a note payable at the bank on january 1 . 5. Declared and pilid a s18 000 dividend. 6. Purchased teasury siock for cosh. 7. Acquired land valued of $72,000 by ishaige 7,200 shares of comnion stock. finculaed a. Coerpote the thange in cash that occarred in 2013 : b. Piepare a stanement of cash flows using the direct method. Use one cath outhow for "cath paid for wages and other operating expenses" Accounts payable relates to intwntory purchases only a. Shange in Eash doring 20131 1