The following changes took place last year in Pavolik Company's balance sheet accounts: Asset and Contra-Asset Accounts Cash Accounts receivable Inventory Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation $ 13 D $ 1501 $ 70 D $ 171 $ 14 D $ 169 I S521 Liabilities and Stockholders' Equity Accounts Accounts payable Accrued liabilities Income taxes payable Bonds payable Common stock Retained earnings $ 4 D 5 16 1 $ 134 1 $ 54 I D = Decrease: 1 = Increase Long-term investments that cost the company $14 were sold during the year for $24 and land that cost $23 was sold for $17. In addition, the company declared and paid $30 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Pavolik did not retire any bonds during the year or issue any new common stock The company's income statement for the year follows: $ 660 400 25e 184 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land Gain on sale of investments Income before taxes Income taxes Net income $ (6) The company's beginning cash balance was $114 and its ending balance was $101. Required: Use the direct method to convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Pavolik Company Direct Method of Determining the Net Cash flows from Operating activities Sales Adjustments to a cash basis: Increase in accounts receivable Cost of goods sold Adjustments to a cash basis: Decrease in inventory Increase in accounts payable Selling and administrative expenses Adjustments to a cash basis: Increase in prepaid expenses Decrease in accrued liabilities Depreciation Income taxes Adjustments to a cash basis: Increase in income taxes payable Net cash provided by operating activities