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 $ 5D $110 I $ 79 D $ 91 $ 60 $ 185 I $ 60 I Liabilities and Stockholders' Equity Accounts Accounts payable Accrued liabilities Income taxes payable Bonds payable Common stock Retained earnings D = Decrease; I = Increase. Long-term Investments that cost the company $6 were sold during the year for $16 and land that cost $15 was sold for $9. In addition, the company declared and paid $30 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: $700 400 116 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land Gain on sale of investments Income before taxes Income taxes Net income $ (6) The company's beginning cash balance was $90 and its ending balance was $85. Required: 1. Use the Indirect method to determine the net cash provided by operating activities for the year. 2. Prepare a statement of cash flows for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use the indirect method to determine the net cash provided by operating activities for the year. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) 80 Pavolik Company Statement of Cash Flows (partial) INet income Adjustments to convert net income to a cash basis: Depreciation $ Increase in accounts payable Decrease in inventory Loss on sale of land Decrease in accrued liabilities Increase in income taxes payable Gain on sale of long-term investments 4 8 (6) < Required 1 Required 2 >

Answer 1

Pg ploc Answer:- Required-i: Net cash flows Parolik Statement company of cash flows (partial) Net Income $84 Adjustment to conveyt Net Income to cash basis Depreciation (Accumulated depreciation $60 Increase in accounts recievable Decrease in Inventory Increase in pre-paid top: Increase in accounts payable Decrease in accured liabilities Increase in Income tax payable Gain on sale of long term (16-6) Investment loss on sale of land (15- 9 Net cash provided by operating activities 1 (10) 6 $130

Pg No 9 Required (2) Statement of cash flocos:- pavolik Company Statement of cash flows Operating Activities: ($130 Net cash provided operating Activities by the Investing Activities procceed from sale of long term Investment $16 proceed from sale of land Addition to property, plant & Equip (185+15) (200) Net cash used in Investing Activities (175) Financing Activities Insurance on bonds payable Purchase of common stock cash dividends : niet cash provided by Financing Activities Net decrease in Cash Add Begining cash & cash equivalent : Ending cash & cash equivalent