The following changes took place last year in Pavolik Company\'s balance sheet a

Question

The following changes took place last year in Pavolik Company's balance sheet accounts Asset and Contra-Asset Accounts Cash Accounts receivable Inventory Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation Liabilities and Stockholders' Equity Accounts $14 D Acconts payable $ 18I Accrued liabilities $ 46 D Income taxes payable $13 I Bonds payable $ 15 D Common stock $305 I Retained earnings $ 44 I $ 18 D $ 23 I $156 I $ 72 D 64 I 64 I D Decrease;-Increase Long-term investments that cost the company $15 were sold during the year for $34 and land that cost $33 was sold for $18. In addition, the company declared and paid $12 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: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: $840 362 478 360 118 $ (15) 19 Loss on sale of land Gain on sale of investments Income before taxes Income taxes Net income 122 46 $ 76 The company's beginning cash balance was $116 and its ending balance was $102

Explanation / Answer

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PAVOLIK COMPANY Statement of Cashflows (Partial) Cash flows from operating activities Net Income $         76 Adjustments to reconcile net income to : Depreciation expense $         64 Loss on sale of land $         15 Gain on sale of investment $       (19) Increase in accounts receivable $       (18) Decrease in inventory $         46 Increase in prepaid expenses $       (13) Increase in accounts payable $         44 Decrease in accrued liabilities $       (18) Increase in income tax payable $         23 $       124 Net cash flow from operating activities $       200

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