Edit View HlstoryBookmarks Tools Window Help Help Save &ExitSubmit; Exercise 14-

Question

Edit View HlstoryBookmarks Tools Window Help Help Save &ExitSubmit; Exercise 14-4 Prepare a Statement of Cash Flows [LO14-1, LO14-2) The following changes took place last year in Pavolilk Company's balance sheet accounts: 20 D Aocounts payable $ 241 Accrued liabilities s 24 D s 29 I 204 1 96 D 82 T kocounta receivable Prepaid expenses tong-term i Property, plant, and equipment395 keeumalated depreeiation 21 D Common atock Retained earnings t 82 1 D- Decrease; 1 - Increase Long-term Investments that cost the company $21 were sold during the year for $46 and land that cost $45 was sold for $24. In addition, the company declared and paid $18 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: $1,020 Cost of goode sold sargin Belling and administrative expenses Net operating income Nonoperating itema MacBook Pro 80 5 8 9

Explanation / Answer

Cash Flow Statement of Pavolik Company for the year ended Cash flows from operating activities Profit before taxation 158 Adjustments for: Depreciation 82 Loss on sale of land 21 Gain on sale of investment -25 Working capital changes: (Increase) / Decrease in trade and other receivables -24 (Increase) / Decrease in inventories 58 (Increase) / Decrease in prepaid expenses -19 Increase / (Decrease) in trade payables 62 Increase / (Decrease) in accrued liabilities -24 Increase in income tax payable 29 Net cash from operating activities 318 Cash flows from investing activities Proceeds from sale of long-term investments 46 Proceeds from sale of land 24 Additions to property, plant and equipment -498 Net cash used in investing activities -428 Cash flows from financing activities Issuance of bonds Payable 204 Purchase of common stock -96 Cash dividends -18 Net cash used in financing activities 90 Net increase in cash and cash equivalents -20 Cash and cash equivalents at beginning of period 128 Cash and cash equivalents at end of period 108

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