Question

Question 12 A comparative balance sheet for Rocker Company appears below: Dec 31, 2019 ROCKER COMPANY Comparative Balance Sheet Dec. 31, 2020 Assets Cash $34,000 Accounts receivable 18,000 Inventory 25,000 Prepaid expenses 6,000 Long-term investments 0 Equipment 60,000 Accumulated depreciation-equipment (20,000) Total assets $123,000 Liabilities and Stockholder's Equity Accounts payable $17,000 Bonds payable 36,000 Common stock 40,000 Retained earnings 30,000 Total liabilities and stockholders' equity $123,000 $11,000 13,000 17,000 9,000 17,000 33,000 (15,000) $85,000 $7,000 45,000 23,000 10,000 $85,000 Additional information: 1. Net income for the year ending December 31, 2020 was $35,000. Cash dividends of $15,000 were declared and paid during the year. Fanm 246366B0N1OOFE d. A Division of John Wiley & Sons, Inc. gen/shared/assign

Answer 1

Statement of Cash Flows
For the Year Ended December 31, 2020
Cash Flows from Operating Activities:
Net income		35000
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	5000
Loss on sale of long-term investments	3000
Increase in Accounts Receivable	-5000
Increase in inventory	-8000
Decrease in prepaid expenses	3000
Increase in Accounts Payable	10000
		8000
Net cash provided by operating activities		43000
Cash Flows from Investing Activities:
Sale of long-term investments	14000
Purchase of Equipment	-27000
Net Cash used by Investing Activities		-13000
Cash Flows from Financing Activities
Payment of Cash Dividends	-15000
Redemption of Bonds Payable	-9000
Issuance of Common Stock	17000
Net Cash Used by Financing Activities		-7000
Net Increase in Cash		23000
Cash at Beginning of Period		11000
Cash at End of Period		34000