The comparative balance sheet of Navaria Inc. for December 31,20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2Assets 3 Cash $625,680.00 $586,230.00 4 Accounts receivable (net)228,100.00 208,850.00 5 Inventories 640,910.00 617,650.00 6Investments 0.00 240,620.00 7 Land 328,090.00 0.00 8 Equipment704,540.00 553,320.00 9 Accumulated depreciation-equipment(166,310.00) (147,840.00) 10 Total assets $2,361,010.00$2,058,830.00 11 Liabilities and Stockholders’ Equity 12 Accountspayable $425,280.00 $404,550.00 13 Accrued expenses payable41,990.00 52,020.00 14 Dividends payable 24,190.00 20,170.00 15Common stock, $4 par 150,000.00 100,000.00 16 Paid-in capital:Excess of issue price over par—common stock 417,500.00 280,000.0017 Retained earnings 1,302,050.00 1,202,090.00 18 Total liabilitiesand stockholders’ equity $2,361,010.00 $2,058,830.00 The incomestatement for the year ended December 31, 20Y3, is as follows: 1Sales $5,371,994.00 2 Cost of merchandise sold ?3,306,650.00 3Gross profit $2,065,344.00 4 Operating expenses: 5 Depreciationexpense $18,470.00 6 Other operating expenses 1,756,355.00 7 Totaloperating expenses 1,774,825.00 8 Operating income $290,519.00 9Other income: 10 Gain on sale of investments 38,570.00 11 Incomebefore income tax $329,089.00 12 Income tax expense 132,549.00 13Net income $196,540.00 Additional data obtained from an examinationof the accounts in the ledger for 20Y3 are as follows: A. Theinvestments were sold for $279,190 cash. B. Equipment and land wereacquired for cash. C. There were no disposals of equipment duringthe year. D. The common stock was issued for cash. E. There was a$96,580 debit to Retained Earnings for cash dividends declared.Prepare a statement of cash flows, using the direct method ofpresenting cash flows from operating activities. Be sure tocomplete the heading of the statement. Refer to the Labels andAmount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign to indicatecash out flows, cash payments, decreases in cash, or any negativeadjustments.
