Question

The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 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 6 Investments 0.00 240,620.00 7 Land 328,090.00 0.00 8 Equipment 704,540.00 553,320.00 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 Accounts payable $425,280.00 $404,550.00 13 Accrued expenses payable 41,990.00 52,020.00 14 Dividends payable 24,190.00 20,170.00 15 Common stock, $4 par 150,000.00 100,000.00 16 Paid-in capital: Excess of issue price over par—common stock 417,500.00 280,000.00 17 Retained earnings 1,302,050.00 1,202,090.00 18 Total liabilities and stockholders’ equity $2,361,010.00 $2,058,830.00 The income statement for the year ended December 31, 20Y3, is as follows: 1 Sales $5,371,994.00 2 Cost of merchandise sold  3,306,650.00 3 Gross profit $2,065,344.00 4 Operating expenses: 5 Depreciation expense $18,470.00 6 Other operating expenses 1,756,355.00 7 Total operating expenses 1,774,825.00 8 Operating income $290,519.00 9 Other income: 10 Gain on sale of investments 38,570.00 11 Income before income tax $329,089.00 12 Income tax expense 132,549.00 13 Net income $196,540.00 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: A. The investments were sold for $279,190 cash. B. Equipment and land were acquired for cash. C. There were no disposals of equipment during the 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 of presenting cash flows from 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 out flows, cash payments, decreases in cash, or any negative adjustments.

Answer 1