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Asset and Contra-Asset Accounts Liabilities and Stockholders' Equity Accounts Cash and cash equivalents.. Accounts receivable Inventory ..... Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation $5 D Accounts payable. $110 I Accrued liabilities. $70 D Income taxes payable $9 I Bonds payable $6 D Common stock $185 I Retained earnings $60 I $35 I $4 D $8 1 $150 I $80 D $54 I ... ...... D= Decrease; I= Increase $700 Sales ..... 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 400 300 184 116 $(6) 10 120 Income before taxes 36 Income taxes.. $ 84 Net income

Asset and Contra-Asset Accounts Liabilities and Stockholders' Equity Accounts Cash and cash equivalents.. Accounts receivable Inventory ..... Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation $5 D Accounts payable. $110 I Accrued liabilities. $70 D Income taxes payable $9 I Bonds payable $6 D Common stock $185 I Retained earnings $60 I $35 I $4 D $8 1 $150 I $80 D $54 I ... ...... D= Decrease; I= Increase $700 Sales ..... 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 400 300 184 116 $(6) 10 120 Income before taxes 36 Income taxes.. $ 84 Net income

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Prepare a Statement of Cash Flows

The following changes took place last year in Pavolik Company’s balance sheet accounts:

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:

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.

Asset and Contra-Asset Accounts Liabilities and Stockholders' Equity Accounts Cash and cash equivalents.. Accounts receivable Inventory ..... Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation $5 D Accounts payable. $110 I Accrued liabilities. $70 D Income taxes payable $9 I Bonds payable $6 D Common stock $185 I Retained earnings $60 I $35 I $4 D $8 1 $150 I $80 D $54 I ... ...... D= Decrease; I= Increase
Transcribed Image Text:Asset and Contra-Asset Accounts Liabilities and Stockholders' Equity Accounts Cash and cash equivalents.. Accounts receivable Inventory ..... Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation $5 D Accounts payable. $110 I Accrued liabilities. $70 D Income taxes payable $9 I Bonds payable $6 D Common stock $185 I Retained earnings $60 I $35 I $4 D $8 1 $150 I $80 D $54 I ... ...... D= Decrease; I= Increase
$700 Sales ..... 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 400 300 184 116 $(6) 10 120 Income before taxes 36 Income taxes.. $ 84 Net income
Transcribed Image Text:$700 Sales ..... 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 400 300 184 116 $(6) 10 120 Income before taxes 36 Income taxes.. $ 84 Net income
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