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The comparative balance sheet of Livers Inc. for December $31,\text{ }20$Y$3$ and $20$Y$2,$ is as follows: Dec. $31,\text{ }20$Y$3$ Dec. $31,\text{ }20$Y$2$

Assets

Cash $..........................................................$ $ $155,000$ Accounts receivable $($net$)\text{ }.......................................$ Inventories $....................................................$ Investments $...................................................$ Land $..........................................................$

$450,000\text{Â }770,000\text{Â }0$

$500,000$

Equipment..................................................... Accumulated depreciation$\mathrm{—}$equipment $.........................$

Total assets $....................................................$ Liabilities and Stockholders$\mathrm{’}$ Equity

$1,400,000\text{Â }(600,000)$

$$2,675,000$

Accounts payable $($merchandise creditors$)\text{ }.......................$ $ $340,000$ Accrued expenses payable $($operating expenses$)\text{ }.................$ Dividends payable.............................................. Common stock, $$4$ par $..........................................$ Paid$-$in capital in excess of par$\mathrm{—}$common stock $..................$ Retained earnings $..............................................$ Total liabilities and stockholders$\mathrm{’}$ equity..........................

$45,000\text{Â }30,000$

$700,000\text{Â }200,000$

$1,360,000$ $$2,675,000$

$ $150,000\text{Â }400,000\text{Â }750,000\text{Â }100,000\text{Â }0$

$1,200,000\text{Â }(500,000)$

$$2,100,000$

$ $300,000\text{Â }50,000\text{Â }25,000$

$600,000\text{Â }175,000\text{Â }950,000$

$$2,100,000$

The income statement for the year ended December $31,\text{ }20$Y$3,$ is as follows: Sales $...........................................................$

Cost of goods sold............................................... Gross profit $.....................................................$

Operating expenses: Depreciation expense $........................................$ Other operating expenses $....................................$ Total operating expenses $...................................$ Operating income $...............................................$

Other revenue: Gain on sale of investments $...................................$ Income before income tax $.......................................$

Income tax expense $.............................................$ Net income $.....................................................$

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 $$90,000$ decrease in Retained Earnings for cash dividends declared. Instructions

Prepare a statement of cash flows, using the direct method of presenting cash flows from $($used for$)$ operating activities.

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