The following changes took place last year in Pavolik Company’s balance sheet ac
ID: 2478751 • Letter: T
Question
The following changes took place last year in Pavolik Company’s balance sheet accounts:
D = Decrease; I = Increase.
Long-term investments that had cost the company $29 were sold during the year for $62, and land that had cost $61 was sold for $32. In addition, the company declared and paid $26 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Pavolik did not retire any bonds during the year or issue any new common stock.
The company’s income statement for the year follows:
132
The company’s beginning cash balance was $144 and its ending balance was $116.
Using the indirect method, determine the net cash provided by / used in operating activities for the year. (List any deduction in cash and cash outflows as negative amounts.)
Pavolki Company
Statement Of Cash Flows (partial)
1.
2. Adjustments to convert net income to cash basis
3.
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8.
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10.
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12.
13.
Prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.)
Pavolik Company
Statement Of Cash Flows
1. Operating activities
2.
3. Investing activities
4.
5.
6.
7.
8.
9. Finacing activities
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12.
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16. Beginning Cash and Cash Equivilents
17. Ending Cash and Cash Equivilets
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Asset and Contra-Asset Accounts Liabilities and Equity Accounts Cash $ 28 D Accounts payable $ 86 I Accounts receivable $ 32 I Accrued liabilities $ 32 D Inventory $ 74 D Income taxes payable $ 37 I Prepaid expenses $ 27 I Bonds payable $ 268 I Long-term investments $ 29 D Common stock $ 128 D Property, plant, and equipment $ 515 I Retained earnings $ 106 I Accumulated depreciation $ 106 IExplanation / Answer
Answer:
Pavolik Company Statement Of Cash Flows Cash Flow from operating activities Net income 71 Adjustment: Loss on sale of land 29 Gain on sale of investment -33 Dep 106 Increase in accounts receivable -32 Decrese in inventory 74 Increase in prepaid expenses -27 Increase in accounts payable 86 Decrease in accrued liabilities -32 Increase in income taxes payable 37 208 Net cash provided by operating activities 279 cash Flow from investing activities: Sale of long term investment 62 Sale of land 32 Purchase of plant and equipment -515 -421 Net cash provided by investing activities -421 Cash Flow from financing activities: Dividend paid -26 Increase in bonds payable 268 Decrease in common stock -128 Net cash provided by financing activities 114 Net increase in cash -28 opening cash 144 Closing cash 116Related Questions
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