Question

Problem 13-11A The comparative balance sheets for Rothlisberger Company as of December 31 are presented below ROTHLISBERGER COMPANY Balance Sheets December 31 $57,700 40,700 151,000 14,800 107,600 $47,400 63,000 143,100 24,500 137,900 200,700 200,700 (59,100) (34,700) 155,300 Accounts receivable Prepaid expenses 229,100 (44.900) (35,800) $697,600 $701.400 Liabilities and Stockholders E Accounts payable Bonds payable Common stock, $1 par 46,100 40000 294,700 159,200 19.o00 207,500 $697,600 $701.400 260,000 193,900 Additional information 1. Operating expenses indlude depreciation expense of $42,000 and charges from prepaid expenses of $9,700 2. Land was sold for cash at book value. 3. Cash dividends of $54,500 were pald. 4. Net income for 2017 was $44.600 5. Equipment was purchased for $94,800 cash. In addition, equipment costing $21,000 with a book value of $12,500 was sold for $5,200 cash. 6. Bonds were converted at face value by issuing 34,700 shares of $1 par value common stock.

Answer 1

ROTHLISBERGER COMPANY
Cash Flow Statement
For the ended December 31, 2017
Cash Flow from Operating Activities:
Net Income		$        44,600.00
Add: Adjustments
Loss on sale of Equipment	$      7,300.00
Depreciation expense	$   42,000.00
increase in Accounts Payables	$      6,100.00
Decrease in Prepaid Expenses	$      9,700.00
Decrease in Accounts receivables	$   22,300.00
Increase in Inventory	$   (7,900.00)
		$        79,500.00
A. Cash Flow from Operating Activities		$    1,24,100.00
Cash Flow from Investing Activities:
Sale of Equipment	$      5,200.00
Sale of Land	$   30,300.00
Purchase of Equipment	$ (94,800.00)
B. Cash flow from Investing Activities		$     (59,300.00)
Cash Flow from Financing Activities:
Dividend paid	$ (54,500.00)
C. Cash Flow from Financing Activities		$     (54,500.00)
Increase (Decrease) in cash [A+B+C]		$        10,300.00
Add: cash at the beginning of the year		$        47,400.00
Cash at the end of the year		$        57,700.00

General notes for cash flow

Cash is increased when Current liability increase or Current asset Decrease.

Cash is Decreased when Current liability Decrease or Current asset Increase.

Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash

Profit on sale of asset or investment is a non cash profit and hence will be deducted from operating income.