The following changes took place last year in Pavolik Company\'s balance sheet a

Question

The following changes took place last year in Pavolik Company's balance sheet accounts: Asset and Contra-Asset Accounts Liabilities and Equity Accounts $ 26 I $ 12 D $17 I $108 I $ 48 D $ 46 I $ 8 D Accounts payable $ 12 Accrued liabilities $ 34 D Income taxes payable Cash Accounts receivable Inventory Prepaid expenses Lona-term investments Property, plant, and equipment Accumulated depreciation $ 7 Bods payable $ 9 D Common stock $ 215 Retained earnings $ 46 I D = Decrease; I Increase. Long-term investments that had cost the company $9 were sold during the year for $22, and land that had cost $21 was sold for $12. In addition, the company declared and paid $6 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:

Explanation / Answer

Answer:-

Statement ofCash flow from operating activities particulars Amount Net Income 52 Dep Gain on sale on invst -13 loss on sale on land 9 48 Adjustment Increase in Receivable -12 Decrease in Inventory 34 Increase in prepaid exp -7 Decrease in Accured liabilities -12 Increase in Income tax payable 17 Increase in payable 26 46 Cash flow from operating activities 94

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