Presented below are the balance sheet accounts of Kern, Inc. as of December 31, year 4 and year 3 and their net changes.

Assets

Year 4

Year 3

Net change

Cash

$ 471,000

$ 307,000

$ 164,000

Marketable equity securities, at cost

150,000

250,000

(100,000)

Allowance to reduce marketable equity securities to market

(10,000)

(25,000)

15,000

Accounts receivable, net

550,000

515,000

35,000

Inventories

810,000

890,000

(80,000)

Investment in Word Corp., at equity

420,000

390,000

30,000

Property, plant, and equipment

1,145,000

1,070,000

75,000

Accumulated depreciation

(345,000)

(280,000)

(65,000)

Patent, net

109,000

118,000

(9,000)

Total assets

$3,300,000

$3,235,000

$ 65,000

Liabilities and Stockholders' Equity

A/P and accrued liabilities

$ 845,000

$ 960,000

$(115,000)

Note payable, long term

600,000

900,000

(300,000)

Deferred tax liability

190,000

190,000

--

Common stock, $10 par value

850,000

650,000

200,000

Additional paid-in capital

230,000

170,000

60,000

Retained earnings

585,000

365,000

220,000

Total liabilities and

stockholders' equity

$3,300,000

$3,235,000

$ 65,000

Additional Information:

On January 2, year 4, Kern sold equipment costing $45,000, with a carrying amount of $28,000, for $18,000 cash.

On March 31, year 4, Kern sold one of its marketable equity security holdings for $119,000 cash.

There were no other transactions involving marketable equity securities.

On April 15, year 4, Kern issued 20,000 shares of its common stock for cash at $13 per share.

On July 1, year 4, Kern purchased equipment for $120,000 cash.

Kern's net income for year 4 is $305,000. Kern paid a cash dividend of $85,000 on October 26, year 4.

Kern acquired a 20% interest in Word Corp.'s common stock during year 1. There was no goodwill attributable to the investment which is appropriately accounted for by the equity method. Word reported net income of $150,000 for the year ended December 31, year 4. No dividend was paid on Word's common stock during year 4.

Prepare a statement of cash flows for Kern, Inc. for the year ended December 31, year 4 using the indirect method. Enter deductions/uses as a negative number. Round all amounts to the nearest whole number.

Item

Amount

Amount

Cash flows from operating activities:

Net income

[1]

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

[2]

Amortization of patent

[3]

Loss on sale of equipment

[4]

Equity in income of Word Corp.

[5]

Gain on sale of marketable equity securities

[6]

Decrease in allowance to reduce marketable equity securities to market

[7]

Increase in accounts receivable

[8]

Decrease in inventories

[9]

Decrease in accounts payable and accrued liabilities

[10___]

Net cash provided by operating activities

[11___]

Cash flows from investing activities:

Sale of marketable equity securities

[12___]

Sale of equipment

[13___]

Purchase of equipment

[14___]

Net cash provided by investing activities

[15___]

Cash flows from financing activities:

Issuance of common stock

[16___]

Cash dividend paid

[17___]

Payment on note payable

[18___]

Net cash used in financing activities

[19___]

Net increase in cash

[20___]

Cash at beginning of year

307,000

Cash at end of year

[21___]

Note: Please enter your responses below. Find a way to make them correspond with the number within the table and separate them with semicolons. Use the following examples for [1], [2], and [3] as a reference for formulating your responses:

Example A: (1)555,000; (2)90,555; (3)1,234;
Example B: 1--555,000; 2--90,555; 3--1,234;
Example C: 1 = 555,000; 2 = 90,555; 3 = 1,234;

Be sure that your answers are clear with whichever method you choose.