The comparative balance sheet of Hirayama Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

1		Dec. 31, 20Y2	Dec. 31, 20Y1
2	Assets
3	Cash	$491.00	$157.00
4	Accounts receivable (net)	285.00	196.00
5	Inventories	173.00	109.00
6	Land	401.00	451.00
7	Equipment	220.00	173.00
8	Accumulated depreciation-equipment	(62.00)	(29.00)
9	Total assets	$1,508.00	$1,057.00
10	Liabilities and Stockholders Equity
11	Accounts payable (merchandise creditors)	$173.00	$157.00
12	Dividends payable	35.00
13	Common stock, $1 par	98.00	50.00
14	Excess of paid-in capital over par	255.00	122.00
15	Retained earnings	947.00	728.00
16	Total liabilities and stockholders equity	$1,508.00	$1,057.00

The following additional information is taken from the records:

1.	Land was sold for $122.
2.	Equipment was acquired for cash.
3.	There were no disposals of equipment during the year.
4.	The common stock was issued for cash.
5.	There was a $321 credit to Retained Earnings for net income.
6.	There was a $102 debit to Retained Earnings for cash dividends declared.

Required:

a.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

b.

Was Hirayama Industries Inc.s net cash flows from operations more or less than net income? What is the source of this difference?

Labels
December 31, 20Y2
For the Year Ended December 31, 20Y2
Amount Descriptions
Amortization of intangible assets
Cash received from sale of land
Cash paid for purchase of equipment
Cash received from issuing common stock
Cash dividends
Decrease in accounts payable
Decrease in accounts receivable
Decrease in inventories
Depreciation
Gain on sale of land
Increase in accounts payable
Increase in accounts receivable
Increase in inventories
Loss on sale of land
Net increase in cash
Net decrease in cash
Net cash flows from operating activities
Net cash flows used for operating activities
Net cash flows from investing activities
Net cash flows used for investing activities
Net cash flows from financing activities
Net cash flows used for financing activities
Net income
Net loss

Hirayama Industries Inc.

Statement of Cash Flows

1	Cash flows from (used for) operating activities:
2
3	Adjustments to reconcile net income to net cash flows from (used for) operating activities:
4
5
6	Changes in current operating assets and liabilities:
7
8
9
10
11	Cash flows from (used for) investing activities:
12
13
14
15	Cash flows from (used for) financing activities:
16
17
18
19
20	Cash balance, January 1, 20Y2
21	Cash balance, December 31, 20Y2