Statement of Cash Flows-Direct Method applied to PR 16 1A The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows: Dec. Dec. 31, 20Y3 31, 20Y2 Assets Cash Accounts receivable (net) Inventories Investments Land Equipment Accumulated depreciation- equipment 230,530 82,200 242,810 94,480 0 217,300 (65,600)(58,600) $925,440 $808,720 243,510 89,600 252,520 0 129,440 275,970 Total assets Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $1 par Paid-in capital: Excess of issue price over par-common stock Retained earnings 159,320 21,030 7,300 38,010 109,990 473,070 $925,440 $808,720 167,290 16,820 9,100 49,400 188,100 494,730 Total liabilities and stockholders' equity The income statement for the year ended December 31, 20Y3, is as follows Sales Cost of merchandise sold Gross profit Operating expenses: $1,536,240 944,790 591,450 Depreciation expense $7,000 Other operating expenses 500,810 Total operating expenses 507,810 Operating income 83,640 Other income: Gain on sale of investments 15,800 Income before income tax $99,440 Income tax expense 39,780 Net income $59,660 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $110,280 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 $38,000 debit to Retained Earnings for cash dividends declared Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments