Michaels Company had available at the end of 2025 the following information.

Instructions

Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for- sale.

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Cash Accounts receivable Short-term investments Inventory Prepaid rent Prepaid insurance Supplies Land Michaels Company Balance Sheets Comparative As of December 31, 2025 and 2024 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Patents Total assets 2025 $10,000 20,500 22,000 42,000 3,000 2,100 1,000 125,000 350,000 (105,000) 525,000 (130,000) 45,000 $910,600 2024 $ 4,000 12,950 30,000 35,000 12,000 900 750 175,000 350,000 (87,500) 400,000 (112,000) 50,000 $871,100