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PR 16-1A Statement of cash flows-indirect method OBJ. 2 The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is shown as follows: Dec. 31,20Y3 Dec. 31,20Y2 Assets $155,000 450,000 770,000 0 500,000 S 150,000 400,000 750,000 100,000 0 1,200,000 (500,000) 2,100,000 Liabilities and Stockholders' Equity S340,000 45,000 30,000 700,000 200,000 S300,000 50,000 25,000 600,000 175,000 950,000 $2,100,000 Paid-in capital: Excess of issue price over par-common stock..... Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $175,000 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 $500,000 credit to Retained Earnings for net income. f. There was a $90,000 debit to Retained Earnings for cash dividends declared. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. NAVARIA INC. Spreadsheet (Work Sheet) for Statement of Cash Flows For the Year Ended December 31, 20Y3 Balance, Transactions Balance, Dec. 31, 20Y2 150,000 400,000 750,000 100,000 Debit Credit Dec. 31, 20Y3 155,000 450,000 770,000 Cash Accounts receivable (net) Inventories Investments Land Equipment Accum. depr. equipment Accounts payable Accrued expenses payable Dividends payable Common stock, $4 par Paid-in capital in excess of par Retained eamings Totals Operating activities 1,200,000 (500,000) (300,000) (50,000) (25,000) (600,000) (175,000) 50,000 500,000 1,400,000 (600,000) (340,000) (45,000) (30,000) (700,000) (200,000) 1,360,000 Net income Depreciation Gain on sale of investments Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Investing activities Purchase of equipment Purchase of land Sale of investments Financing activities Declaration of cash dividends Sale of common stock Increase in dividends payable Net increase in cash Totals