Appendix 2PR 13-4B Statement of cash flowsdirect method The comparative balance sheet of Martinez Inc. for December 31, 20Y4 and 20Y3, is as follows:Dec. 31, 20Y4Dec. 31, 20Y3AssetsCash .....................................................$ 661,920$ 683,100Accounts receivable (net) .................................. 992,640 914,400Inventories ...............................................1,394,4001,363,800Investments ..............................................0432,000Land ..................................................... 960,0000Equipment................................................1,224,000 984,000Accumulated depreciationequipment ....................(481,500)(368,400)Total assets ...............................................$4,751,460$4,008,900Liabilities and Stockholders EquityAccounts payable (merchandise creditors) ..................$1,080,000$ 966,600Accrued expenses payable (operating expenses) ............67,80079,200Dividends payable.........................................100,80091,200Common stock, $5 par .................................... 130,000 30,000Paid-in capital in excess of parcommon stock................. 950,000 450,000Retained earnings.........................................2,422,8602,391,900Total liabilities and stockholders equity.....................$4,751,460$4,008,900 The income statement for the year ended December 31, 20Y3, is as follows:Sales .....................................................$ 4,512,000Cost of goods sold......................................... (2,352,000)Gross profit ...............................................$ 2,160,000Operating expenses:Depreciation expense ..................................$ 113,100Other operating expenses .............................. 1,344,840Total operating expenses ............................ (1,457,940)Operating income.........................................$ 702,060Other revenue:Gain on sale of investments............................. 156,000Income before income tax .................................$ 858,060Income tax expense ....................................... (299,100)Net income ...............................................$ 558,960Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:a. Equipment and land were acquired for cash.b. There were no disposals of equipment during the year.c. The investments were sold for $588,000 cash.d. The common stock was issued for cash.e. There was a $528,000 debit to Retained Earnings for cash dividends declared.Instructions Prepare a statement of cash flows, using the direct method of presenting cash flows from operat-ing activities