Question

Exercise 17-8 Your answer is partially correct. Try again. Here are comparative balance sheets for Velo Company. VELO COMPANY Comparative Balance Sheets December 31 2016 2017 Assets Cash $73,400 $33,100 Accounts receivable 71,200 85,800 Inventory 170,200 187,000 Land 101,000 72,800 Equipment 260,600 200,800 Accumulated depreciation-equipment (66,100) (33,900) Total $596,700 $559,200 Liabilities and Stockholders' Equity Accounts payable $35,000 $47,500 Bonds payable 151,400 203,400 Common stock ($1 par) 217,600 174,100 Retained earnings 192,700 134,200 Total $596,700 $559,200 Additional information: 1. Net income for 2017 was $103,600. 2. Cash dividends of $45,100 were declared and paid. 3. Bonds payable amounting to $52,000 were redeemed for cash $52,000. 4. Common stock was issued for $43,500 cash. 5. No equipment was sold during 2017, but land was sold at cost.

Answer 1

Statement of Cash Flows - Indirect Approach
	Amount in $	Amount in $
Net income		$          1,03,600
Cash flows from operating activities
Adjustments for reconcile the net income to:
Depreciation	$             32,200
Increase in account receivable	$            -14,600
Decrease in inventory	$             16,800
Decrease on account payable	$            -12,500
		$             21,900
Net cash from operating activities		$          1,25,500
Cash flows from investing activities
Sale of land	$             28,200
Purchase of Equipment	$            -59,800
Net cash used in investing activities		$            -31,600
Cash flows from Financing activities
Dividend Paid	$            -45,100
Redumption of Bonds	$            -52,000
Issue of Common Stock	$             43,500
Net cash used in financing activities		$            -53,600
Net increase in cash and cash equivalents		$             40,300
Add :Cash and cash equivalents at beginning of period		$             33,100
Cash and cash equivalents at end of period		$             73,400