Statement of Cash Flows - Direct Method The comparative balance sheet of Martinez Inc. for December 31, 2014 and 20Y3, is as follows: Dec 31, 2014 Dec 31, 2013 Assets Cash Accounts receivable (net) Inventories Investments $661,920 992,640 1,394,400 $683,100 914,400 1,363,800 432,000 0 0 960,000 Land 984,000 Equipment Accumulated depreciation equipment 1,224,000 (481,500) (368,400) $4,008,900 Total assets $4,751,460 $1,000,000 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable 67,800 $966,600 79,200 91,200 100,800 Common stock, $5 par 130,000 30,000 Pald-in capital in excess of par-common stock 950,000 450,000 950,000 Paid in capital in excess of par-common stock Retained earnings Total liabilities and stockholders' equity 2.422,860 $4,751,460 450,000 2,391,900 $4,000,900 The income statement for the year ended December 31, 20Y3, is as follows: Sales Cost of goods sold $4,512,000 (2,352,000) $2,160,000 $113,100 1,344,840 Gross profit Operating expenses Depreciation expense Other operating expenses Total operating expenses Operating income Other revenue: Gain on sale of investments (1,457,940) $702,060 156,000 Income before income tax 5858,060 Income tax expense (299,100) $558,960 Net Income Hind fra vest that the Indone for Fall Ner income $558,960 Additional data obtained from an examination of the accounts in the ledger for 2073 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. Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash outfiows, cash payments, decreases in cash, or any negative adjustments, Martinez Inc. Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from (used for operating activities: Cash received from customers Cash payments for merchandise Cash payments for operating expenses Cash payments for income tax Net cash flow from operating activities Cash flows from (used for) investing activities: Cash payments for operating expenses Cash payments for income tax Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments Gash paid for land Cash paid for equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock 0 100 bod Cash paid for dividends Net cash flow from financing activities Net decrease in cash Cash balance, January 1, 2014 Cash balance, December 31, 2014