The following changes took place last year in Herald Company’s balance sheet acc

Question

The following changes took place last year in Herald Company’s balance sheet accounts: Asset and Contra-Asset Accounts Liabilities and Equity Accounts Cash $ 57 I Accounts payable $ 24 I Accounts receivable $ 14 D Accrued liabilities $ 10 D Inventory $ 25 I Income taxes payable $ 11 I Prepaid expenses $ 6 D Bonds payable $ 17 D Long-term investments $ 29 D Common stock $ 44 I Property, plant, and equipment $ 146 I Retained earnings $ 55 I Accumulated depreciation $ 43 I D = Decrease; I = Increase. Long-term investments that had cost the company $51 were sold during the year for $46, and land that had cost $29 was sold for $71. In addition, the company declared and paid $31 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. Herald did not issue any bonds during the year or repurchase any of its own stock. The company’s income statement for the year follows: Sales $ 601 Cost of goods sold 245 Gross margin 356 Selling and administrative expenses 277 Net operating income 79 Nonoperating items: Loss on sale of investments $ (5) Gain on sale of land 42 37 Income before taxes 116 Income taxes 30 Net income $ 86 The company’s beginning cash balance was $102 and its ending balance was $159. Required: Use the direct method to convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted and Net cash "used in" operating activities should be indicated with a minus sign and all other amounts as positive values.) Herald Company’s Direct Method of Determining the Net Cash flows from Operating activities Sales $ Adjustments to a cash basis: $ Cost of goods sold Adjustments to a cash basis: Selling and administrative expenses Adjustments to a cash basis: Income taxes Adjustments to a cash basis: Net cash operating activities $ ©2015 McGraw-Hill Education. All rights reserved.

Explanation / Answer

Similarly, substitute for , 80 MPa for ,0.345 for , –30 MPa for ,and 0 for in .

Finally, substitute for , 80 MPa for ,0.345 for , –30 MPa for ,and 0 for in .

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