The followingchanges took place last yoar in Pavolik Company\'s balance shoot ac

Question

The followingchanges took place last yoar in Pavolik Company's balance shoot accounts AOurts Accounts necovablo Accruod liabiitas 6 D Income ts payabla Bonds payablo Proparty, plant, and oquipment 4I Long tomm investmants that had cost the company 525 ware sold during the year for $54, and land that ar. Beidos tha sale of land, no othar sas ar netinements of plant and squipmaent book place duringtha had coet $53 was sold for $28. In addtion, the company dadlaad and paid 522 in cash dvidands during the yoar. Pavolik did not ratire any bands duning the yoar ar ue any now common sock The company's income statoment for the year follows $1,140 Cost of goods sold Gro nagin Selling and administrative po Not operating incom Gain on sale of investment 29 Nat incoma 116 The company's baginning cash balance was $136 and ts anding balanoe was $112 Required: 1. Uaing tha indi rct mathod, datarmina the net ach prowidad by used in oparating activitios for thea yoar (Lict any deduedon In cach and cach outiows as nagattve amounts.) ataterment of Cach Flows Indireot Mathod ( indireot Method Partal Adi.st.arts t convert nat income to cash basa 2 Prapare a stabomont of cash fows for the yoar (Lict any deduoton In oach and oach cutlows negative mounts.) atatement f Cach nvesting activ tos ancing actvites Baginning cash and cah qualents Ending cash and cash oquvalants

Explanation / Answer

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Note: The increase in property, plant, and equipment is $455 which is net of $53 cost of land sold. Hence purchase of property, plant, and equipment is $508 ($455 + $53).

Pavolik Company Statement of Cash Flows - Indirect Method (Partial) Net income 116 Adjustments to convert net income to a cash basis: Depreciation expense 94 Loss on sale of land 25 Gain on sale of investments -29 Increase in accounts receivable -28 Decrease in inventory 66 Increase in prepaid expenses -23 Increase in accounts payable 74 Decrease in accrued liabilities -28 Increase in income taxes payable 33 184 Net cash provided by operating activities 300

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