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On the basis of the following data for Larson for the year ending December 31 Year 2, and the preceding year ended December 31 Year 1, prepare a statement of cash flows. Use the Indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that: Equipment costing $125,000 was purchased for cash Equipment conting $85,000 with accumulated depreciation of $65,000 was sold for $15,000. The stock was issued for cash The only entries in the retained earnings account were not income of $51,000 and cash dividends declared of $13,000 Year 2 Cash Accounts receivable (net) Inventories Ement $100,000 78,000 101.500 410,000 (150,000) $59.500 $78.000 85.000 90.000 370,000 (158,000) $465.000 Accumulated depreciation Total assets $58,500 $55.000 Liabilities and Stockholders' Equity Accounts payable merchandise creditors) Cash dividends payable Common stock, 510 par Paid in capital in excess of par. common stock. 200,000 62.000 Paid-in capital in excess of par-common stock Retained earnings 62,000 214,000 $539,500 60,000 176,000 $465,000 Total liabilities and stockholders' equity Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Larson Co. Statement of Cash Flows For Year Ended December 31, Year 2 Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities bo 100 Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow provided by financing activities: Cash at the beginning of the year Cash at the end of the year

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