17-9 Rodriquez Corporation\'s comparative balance sheets are d below. RODRIQUEZ

Question

17-9 Rodriquez Corporation's comparative balance sheets are d below. RODRIQUEZ CORPORATION Sheets ber 31 2017 Cash Accounts receivable Investments Equipment Accumulated depreciation-equipment 2016 $17,300 22,100 16,050 69,850 $16,900 24,900 20,250 59,750 (14,150)(10,50o) Total $107,650$114,800 $11,250 11,00030,200 45,200 28,150 $107.650$114,800 $14,850 Accounts payable Bonds payable Common stock Retained earnings 49,900 31,900 Total Additional information: 1. Net income was $18,250. Dividends declared and paid were stH,500. 2. Equipment which cost s1o,100 and had accumulated depreciation of $1/700 was sold for $8,600 3. No noncash investing and financing activities occured durnng 2017

Explanation / Answer

RODRIQUEZ CORPORATION Statement of cash flow for 2017 (Indirect Method) Cash flow from Operating Activities Net Income $18,250.00 Adjustments to net income Depreciation $5,350.00 Loss on sale of equipment $4,800.00 Increase in Accounts Receivable -$2,800.00 Increase in Accounts Payable $3,600.00 $10,950.00 Net Cash available from Operating Activities $29,200.00 Cash flow from Investing activities Sale of equipment $3,600.00 Purchase of Investment -$4,200.00 Net cash used for Investing Activities -$600.00 Cash flow from Financing Activities Repayment of Bonds Payable -$19,200.00 Issue of Common stock $4,700.00 DivIdend Paid -$14,500.00 Net Cash used For Financing Activities -$29,000.00 Net Cash Surplus ( Deficit) -$400.00 Add : Cash balance 2016 $17,300.00 Cash balance 2017 $16,900.00 Calculation of Depreciation expense for 2017 Accumulated depreciation 2017 $14,150.00 Add : Accumulated depreciation on equipment sold $1,700.00 Less : Accumulated depreciation 2016 $10,500.00 Depreciation expense for 2017 $5,350.00 Calculation of gain / loss on sale of equipment Cost of equipment $10,100.00 Less : Accumulated depreciation $1,700.00 Book value of equipment $8,400.00 Less : Sale value of equipment $3,600.00 Loss on sale of equipment $4,800.00

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