Exercise 12-8 (Part Level Submission) Novak Corp.’s comparative balance sheets a
ID: 2586947 • Letter: E
Question
Exercise 12-8 (Part Level Submission)
Novak Corp.’s comparative balance sheets are presented below.
Novak Corp.
Comparative Balance Sheets
December 31
2019
2018
$ 14,200
$ 10,500
21,700
23,500
20,200
26,500
69,800
69,800
(15,200
)
(11,000
)
$110,700
$119,300
$ 11,800
$ 28,600
75,200
71,200
23,700
19,500
$110,700
$119,300
Additional information:
(a)
Prepare a statement of cash flows for 2019 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
Novak Corp.
Comparative Balance Sheets
December 31
2019
2018
Cash$ 14,200
$ 10,500
Accounts receivable21,700
23,500
Land20,200
26,500
Buildings69,800
69,800
Accumulated depreciation—buildings(15,200
)
(11,000
)
Total$110,700
$119,300
Accounts payable$ 11,800
$ 28,600
Common stock75,200
71,200
Retained earnings23,700
19,500
Total$110,700
$119,300
Explanation / Answer
Novak Corp. Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from operating activities Net income 22200 Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense 4200 Loss on sale of land 1600 Decrease in accounts receivable 1800 Decrease in accounts payable -16800 -9200 Net cash provided by operating activities 13000 Cash flows from investing activities Sale of land 4700 Cash flows from financing activities Issuance of common stock . 4000 Payment of dividends -18000 Net cash used by financing activities -14000 Net increase in cash 3700 Cash at beginning of period 10500 Cash at end of period 14200
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