Prepare the operating activities section only for the statement of cash flows for Corporation using the indirect method for the year ended December 31, Year 2.

Spitfire Corporation Balance Sheets December 31, Year 1 and Year 2 Year 2 $ 152 Year 1 $ 90 260 (5) 10 269 (7) 240 70 170 260 (80) 30 $ 1,045 248 46 170 296 (109) $1,099 Assets Cash Accounts receivable Less: Allowance for doubtful accounts Prepaid insurance Inventory Long-term investment Land Buildings and equipment Less: Accumulated depreciation Trademark Total Assets Liabilities & Stockholders' Equity Accounts payable Salaries payable Deferred tax liability Lease liability Bonds Payable Less: Discount on bonds Common Stock Paid-In Capital -in excess of par Preferred Stock Retained Earnings Total Liabilities & Stockholders' Equity $ 37 20 70 *213882 280 120 (25) (27) 260 80 300 110 80 384 $ 1.099 380 $1.045 Spitfire Corporation Income Statement For the Year Ended December 31, Year 2 $ 400 14 Net sales revenue Investment revenue Operating Expenses: Cost of Goods Salaries expense Depreciation expense Trademark amortization Bad debts expense Insurance expense Bond interest expense Operating Income Other Income (Expense): Loss on sale of building Gain on sale of investments Pre-Tax Income from Continuing Operations Less: Income Tax Expense: Net Income 340 $ 73 $(30) (24) $ 50 26 $ 24 Additional Information: 1. A building that originally cost $44 million, and which was one-fourth depreciated, was destroyed by fire. Some undamaged parts were sold for $3 million. 2. Investment revenue includes Spitfire Corporation's $8 million share of the net income of Beta Corporation, an equity method investee. 3. $40 million par value of common stock was sold for $70 million, and $80 million of preferred stock was sold at par. 4. A long-term investment in bonds, originally purchased for $32 million, was sold for $38 million 5. Pretax accounting income exceeded taxable income causing the deferred income tax liability to increase by $4 million. 6. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. Annual lease payments of $10 million are paid at January 1st of each year starting in Year 2. 7. $150 million of bonds were retired at maturity. 8. Shareholders were paid cash dividends of $20 million