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 Accounts receivable (net) Inventories Investments Land Equipment Accumulated depreciation-equipment $231,100 84,490 238,120 0 122,050 260,240 (61,800) $874,200 217,380 77,510 228,960 89,090 0 204,910 (55,200) $762,650 Total assets Liabilities and Stockholders' Equity s 157,750 15,860 8,600 46,600 177,400 467,990 $874,200 Accounts payable Accrued expenses payable Dividends payable Common stock, $1 par Paid-in capital: Excess of issue price over par-common stock Retained earnings 150,240 19,830 6,900 35,840 103,720 446,120 762,650 Total liabilities and stockholders' equity The income statement for the year ended December 31, 20Y3, is as follows: Sales Cost of merchandise sold Gross profi Operating expenses: $1,494,040 918,830 575,210 Depreciation expense $ 6,600 Other operating expenses 487,060 Total operating expenses 493,660 Operating income 81,550 Other income: Gain on sale of investments Income before income tax Income tax expense Net income 14,900 $ 96,450 38,580 $57,870 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $103,990 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 $36,000 debit to Retained Earmings for cash dividends deciared. Required: ethod of presenting cash flows from operating activities. Use the minus sign to indicate cash outhlows, cash Prepare a statement of cash flows, using the direct m decreases in cash, or any negative adjustments Navaria Inc. Navaria Inc. Statement of Cash Flows For the Year Ended December 31, 20Y3 Cash flows from operating activities: Cash recelved from customers Cash payments for merchandise v Cash payments for operating Cash payments for income taxes / Net cash flow from operating activities Cash flows from (used for) investing activities: Cash from sale of investments Cash used for purchase of land Cash used for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash from sale of common stock Cash used for dividends Net cash flow from financing activities Increase in cash Cash at the beginning of the year Cash at the end of the year