Question

The information shown below is taken from the accounts of Waverly Corporation for the year ended December 31, 2017 Net income $344,000 Amortization of patent 12,000 Proceeds from issuance of common stock 33,000 Decrease in inventory 37,000 Sale of building at a $15,000 gain 85,000 Decrease in accounts payable 15,000 Purchase of equipment 185,000 Payment of cash dividends 44,000 Depreciation expense 55,000 Decrease in accounts receivable 23,000 Payment of mortgage 85,000 Increase in short-term notes payable 8,000 Sale of land at a $5,000 loss 40,000 Purchase of delivery van 33,000 Cash at beginning of year 105,000 Instructions Prepare a statement of cash flows for Robinson Corporation for the year ended December 31, 2017

Answer 1

Solution:

Waverly/Robinson Corporation
Statement of Cash Flows
for the year ended December 31, 2017
	figures in $	figures in $
Cash flows from operating activities
Net Income		344,000
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Amortization of patent	12,000
Gain on sale of building	(15,000)
Depreciation expense	55,000
Loss on sale of land	5,000
Decrease in inventories	37,000
Decrease in accounts payable	(15,000)
Decrease in accounts receivable	23,000
Increase in short-term notes payable	8,000
		110,000
Net cash provided by operating activities		454,000
Cash flows from investing activities
Payments for purchase of equipment	(185,000)
Proceeds from sale of building	85,000
Proceeds from sale of land	40,000
Payments for purchase of delivery van	(33,000)
Net cash used by investing activities		(93,000)
Cash flows from financing activities
Proceeds from the issuance of common stock	33,000
Payment of cash dividends	(44,000)
Payment of mortgage	(85,000)
Net cash used by financing activities		(96,000)
Net increase in cash & cash equivalents		265,000
Cash & cash equivalents at the beginning of the year		105,000
Cash & cash equivalents at the end of the year		370,000