The Following Information and Financial Statements Excerpts Pertain to Liquidity

The following information and financial statements excerpts pertain to Liquidity Inc.
a.All short term investments (securities available for sale)were purchased on 12/31/14 and sold during 2015.
b.The company entered a lease agreement on 12/31/15.
c.Fixed assets with a net book value of $15 were sold during the year.
d.The company repaid the current portion of long-term debt during the year.
e.Dividend was declared and partially paid.
$\begin{array}{lrr}\hline & \mathbf{2 0 1 4} & \mathbf{2 0 1 5} \\& & \\\hline & & \\ \text { Assets } & \\\text { Cash } & 54 & 45 \\\text { Short term investments } &95 & 0 \\\text { Accounts receivable } &45 & 85 \\\text { Inventory } & 52 & 75 \\\text { Prepaid general expenses } & 11 & 15 \\\text { Fixed assets under capital lease, net } &0& 50 \\\text { Fixed assets, net } &\underline{165} &\underline{2289} \\& 422&498 \\\\\text { Liabilities and stockowners' equity } & \\\text { Accounts payable } &38&48\\\text { Wages payable } &12&6 \\\text { Tax payable } & 3&5\\\text { Dividend payable } & 0 & 4 \\\text { Current portion of long term debt } &10&12 \\\text { Obligations under capital leases } & 0&50 \\\text { Long term debt } &183&180 \\\text { Common stock } &150&163\\\text { Retained earnings } &\underline{26} & \underline{30} \\& 422&498 \\& & \\\hline\end{array}$

Required:
1.Prepare the statement of cash flows for the year 2015 using the direct method.
2.Reconcile net income and net cash flows from operating activities for the year 2015.