Exercise 13-7 Rojas Corporation\'s comparative balance sheets are presented belo
ID: 2498152 • Letter: E
Question
Exercise 13-7 Rojas Corporation's comparative balance sheets are presented below ROJAS CORPORATION Comparative Balance Sheets December 31 2015 Cash Accounts receivable Land Buildings Accumulated depreciation-buildings $14,360 20,910 20,480 69,590 2014 $10,810 23,680 25,800 69,590 (10,140) (15,080) Total 110,260 $119,740 Accounts payable Common stock Retained earnings $12,430 75,830 22,000 $110,260 $30,960 68,620 20,160 $119,740 Total Additional information: 1. Net income was $22,963. Dividends declared and paid were $21,123 2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $4,730Explanation / Answer
ROJAS CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2015
Cash Flows from Operating Activities
Net Income
$22,963.00
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense
$4,940.00
Loss on disposal of land1
$590.00
Decrease in accounts receivable
$2,770.00
Decrease in accounts payable
-$18,530.00
-$10,230.00
Net cash provided by operating activities
$12,733.00
Cash Flows from Investing Activities
Sale of land
$4,730.00
Net cash used by investing activities
$4,730.00
Cash Flows from Financing Activities
Issuance of common stock
$7,210.00
Cash dividends paid
-$21,123.00
-$13,913.00
Net cash provided by financing activities
-$13,913.00
Net decrease in cash
$3,550.00
Cash at the beginning of period
$10,810.00
Cash at the end of period
$14,360.00
Note 1: Loss on disposal of land = $4,730 – ($25,800 - $20,480) = $590
Free cash flow = $12,733 - $7,210 = $5,523
ROJAS CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2015
Cash Flows from Operating Activities
Net Income
$22,963.00
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense
$4,940.00
Loss on disposal of land1
$590.00
Decrease in accounts receivable
$2,770.00
Decrease in accounts payable
-$18,530.00
-$10,230.00
Net cash provided by operating activities
$12,733.00
Cash Flows from Investing Activities
Sale of land
$4,730.00
Net cash used by investing activities
$4,730.00
Cash Flows from Financing Activities
Issuance of common stock
$7,210.00
Cash dividends paid
-$21,123.00
-$13,913.00
Net cash provided by financing activities
-$13,913.00
Net decrease in cash
$3,550.00
Cash at the beginning of period
$10,810.00
Cash at the end of period
$14,360.00
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