Question

The following changes took place Pavolik Company's balance sheet accounts: Asset and Contra-Asset Accounts Cash and cash equivalents recounts receivable Inventory Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation Liabilities and Stockholders' Equity Accounts Accounts payable Accrued liabilities Income taxes payable Bonds payable $150 I Common stock $ 80 D Retained earnings D = Decrease; 1 - 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 during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during not retire any bonds during the year or issue any new common stock. The company's income statement Sales Cost of goods sold Gross margin Selling and administrativ Net operating income Nonoperating items Loss on sale of land Cais on sale of investmen Income before taxes Income taxes Set inc 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.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer Requirement 1 Pavolik Company Statement of cash flow statement Net Income -10 60 Adjustments to reconcile the net income to net cash basis Gain on sale of investments Loss on sale of land Depreciation expense Increase in account receivable Decrease in inventory 2 Increase in prepaid expenses 3 Increase in account payable decrease in accrued liabilities 5 Increase in ncome taxes payable -110 70 -9 35 -4 8 $ $ 46 130 - Net cash flow from operating activities

Requirement 2) Pavolik Company Statement of cash flow statement - Operating activities - Net cash inflow from operating activities Investing activities Proceeds from sale of investments Payment for purchase of property plant and equipment (185+15) - Proceeds from sale of land $ -2001 -175 Net cash outflow from investing activities Financing activities proceeds from bond payable Cash paid for redemption of common stock - Cash paid for dividend 150 -80 -30 s Cash inflow from financing activities Net cashflow from all activities Beginning cash balance Ending cash balance For any help please comment in the comment box