Question 3 ROJAS CORPORATION Comparative Balance Sheets December 31 2017 2016 $1
ID: 2492890 • Letter: Q
Question
Question 3
ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017
2016
$15,100
$10,200
21,200
23,100
20,400
26,000
69,700
69,700
(15,400
)
(10,600
)
$111,000
$118,400
$12,700
$28,200
74,100
73,400
24,200
16,800
$111,000
$118,400
(a)
Adjustments to reconcile net income to
Question 3
Rojas Corporation’s comparative balance sheets are presented below.ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017
2016
Cash$15,100
$10,200
Accounts receivable21,200
23,100
Land20,400
26,000
Buildings69,700
69,700
Accumulated depreciation—buildings(15,400
)
(10,600
)
Total$111,000
$118,400
Accounts payable$12,700
$28,200
Common stock74,100
73,400
Retained earnings24,200
16,800
Total$111,000
$118,400
Additional information:
1. Net income was $22,400. Dividends declared and paid were $15,000. 2. No noncash investing and financing activities occurred during 2017 3. The land was sold for cash of $4,500.
Explanation / Answer
CASH FLOW STATEMENT - INDIRECT METHOD: Cash flow from operating activities: net income 22400 Adjustments to reconcile net income with cash from operations: loss on sale of land 1100 depreciation 4800 decrease in accounts receivable 1900 decrease in accounts payable -15500 -7700 Net cash from operating activities 14700 Cash flow from investing activities: sale of land 4500 Net cash from investing activities 4500 Cash flow from financing activities: dividends paid -15000 common stock 700 Net cash from financing activities -14300 Increase in cash & cash equivalents 4900 Beginning balance of cash 10200 Ending balance of cash 15100
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