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. 31, 20Y3 Dec. 31, 20Y2 Assets Cash $ 207,720 $ 195,270 Accounts receivable (net) 75,900 Inventories 213,910 69,630 205,680 Investments 0 80,030 Land 109,640 0 Equipment 233,770 184,070 Accumulated depreciation-equipment (55,600) (49,600) Total assets $785,340 $685,080 Liabilities and Stockholders' Equity Accounts payable $141,710 $ 134,960 Accrued expenses payable 14,250 17,810 Dividends payable 7,800 6,200 Common stock, $1 par 41,900 32,200 Excess of paid-in capital over par 159,300 93,170 Retained earnings 420,380 400,740 Total liabilities and stockholders' equity $785,340 $685,080 The income statement for the year ended December 31, 20Y3, is as follows: Sales Cost of merchandise sold Gross profit $1,333,300 819,980 $ 513,320 Operating expenses: Depreciation expense Other operating expenses Total operating expenses Operating income Other income: Gain on sale of investments Income before income tax Income tax expense Net income $ 6,000 434,660 440,660 $ 72,660 13,400 $ 86,060 34,420 $ 51,640 Additional data obtained from an examination of the accounts in the ledger for 2013 are as follows: a. The investments were sold for $93,430 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 $32,000 debit to Retained Earnings for cash dividends declared.