Rojas Corporation’s comparative balance sheets are presented below. Question 1 R

Question

Rojas Corporation’s comparative balance sheets are presented below.

Question 1 Rojas Corporation's comparative balance sheets are presented below ROJAS CORPORATION Comparative Balance Sheets December 31 2017 2016 Cash Accounts receivable Land Buildings Accumulated depreciation-buildings $14,200 20,700 19,500 69,500 (14,500) $10,000 22,900 25,500 69,500 (10,000) $109,400 $117,900 Accounts payable Common stock Retained earnings $27,600 71,000 19,300 $109,400 $117,900 $11,800 74,000 23,600 Additional information: 1. Net income was $22,100. Dividends declared and paid were $17,800 2. No noncash investing and financing activities occurred during 2017 3. The land was sold for cash of $4,400

Explanation / Answer

Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities: Net income 22100 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense 4500 Loss on sale of land 1600 Decrease in accounts receivable 2200 Decrease in accounts payable -15800 -7500 Net cash provided by operating activities 14600 Cash flows from investing activities Sale of land 4400 Cash flows from financing activities Issuance of common stock 3000 Payment of dividend -17800 Net cash used by financing activities -14800 Net increase in cash 4200 Cash at beginning of period 10000 Cash at end of period 14200 Free cash flow = 14600-17800= -3200

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