Novak Corp Comparative Balance Sheets December 31 Assets Cash Accounts receivabl
ID: 2404397 • Letter: N
Question
Novak Corp Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Total 2017 2016 $ 100,028 66,195 85,318 208,882 30,891 73,550 222,783 22,477 213,295191,230 294,200 294,200 (88,260) (58,840) 330,975 (66,195) (51,485) 228,005 $1,102,853 $994,396 Liabilities and Stockholders' Equit Accounts payable Bonds payable Common stock, $1 par Retained earnings Total 65,798 52,956 441,300 294,200 235,360 264,780 $1,102,853 $994,396 441,300 301,555 Additional information 1. Operating expenses include depreciation expense of $61,782 2. Land was sold for cash at book value 3. Cash dividends of $17,652 were paid 4. Net income for 2017 was $54,427 5. Equipment was purchased for $135,332 cash. In addition, equipment costing $32,362 with a book value of $14,710 was sold for $11,768 cash. 6. 58,840 shares of $1 par value common stock were issued in exchange for land with a fair value of $58,840 Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis e.g. (15,000).)Explanation / Answer
(Amount in $)
Novak Corp.
Statement of cash flows
For the year ended December 31, 2017
Operating Activities
Net Income
54427
Adjustments:
Add:
Depreciation
61782
Loss on sale of equipment
2942
Decrease in Accounts receivables
11768
Decrease in Prepaid expenses
8414
Increase in Accounts Payable
12842
Less:
Increase in inventory
(13901)
83847
Net cash generated from operating activities (A)
138274
Investing Activities
Sale of land
36775
Purchase of equipment
(135332)
Sale of equipment
11768
Net cash used in investing activities (B)
(86789)
Financing Activities
Dividend paid
(17652)
Net cash used in financing activities (C)
(17652)
Net increase in cash (D=A+B+C)
33833
Cash at the beginning (E)
66195
Cash at the end (F=D+E)
100028
Novak Corp.
Statement of cash flows
For the year ended December 31, 2017
Operating Activities
Net Income
54427
Adjustments:
Add:
Depreciation
61782
Loss on sale of equipment
2942
Decrease in Accounts receivables
11768
Decrease in Prepaid expenses
8414
Increase in Accounts Payable
12842
Less:
Increase in inventory
(13901)
83847
Net cash generated from operating activities (A)
138274
Investing Activities
Sale of land
36775
Purchase of equipment
(135332)
Sale of equipment
11768
Net cash used in investing activities (B)
(86789)
Financing Activities
Dividend paid
(17652)
Net cash used in financing activities (C)
(17652)
Net increase in cash (D=A+B+C)
33833
Cash at the beginning (E)
66195
Cash at the end (F=D+E)
100028
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