The comparative balance sheet of Middaugh Restaurant Supplies Inc. for December 31, 2013 and 2012, is as follows: Dec 31, 2012 Dec 31, 2013 Assets Cash Accounts receivable (net) Inventories Investments Land Equipment.. Accumulated depreciation... $ 330,960 496,320 697,200 0 480,000 612,000 (240,750) $2,375,730 $ 341,550 457,200 681,900 216,000 0 492,000 (184,200) $2,004,450 $ 540,000 33,900 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable. Common stock $10 par Pald-in capital in excess of par-common stock Retained earnings.. 50,400 108,000 364,500 1,278,930 $2,375,730 $ 483,300 39,600 45,600 15,000 225,000 1.195.950 $2,004,450 is as follows: The income statement for the year ended December 31, $2,256,000 1.176,000 $1,080,000 $ 56,550 672.420 Sales Cost of merchandise sold Gross profit 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.. 728,970 $ 351,030 78,000 $ 429,030 149,550 $ 279,480 The following additional information was taken from the records: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $294,000 cash. d. The common stock was issued for cash. e. There was a $196,500 debit to Retained Earnings for cash dividends declared. Instructions Prepare a statement of cash flows, MIDDAUGH RESTAURANT SUPPLIES INC. Statement of Cash Flows For the Year Ended December 31, 2013 Cash flows from operating activities: Cash received from customers Deduct: Net cash flow from operating activities Cash flows from investing activities: Cash received from sale of investments Less: Net cash flow used for investing activities Cash flows from financing activities: Cash received from sale of common stock Less: Net cash flow provided by financing activities Decrease in cash Cash at the beginning of the year Cash at the end of the year Schedule Reconciling Net Income with Cash Flows from Operating Activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense Gain on sale of investments Changes in current operating assets and liabilities: Net cash flow from operating activities Computations: 1. Sales $ 2,256,000 Cash received from customers 2. Cost of merchandise sold Subtotal Cash payments for merchandise 3. Operating expenses other than depreciation Cash payments for operating expenses