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2 Asset and Contra-Asset Accounts Liabilities and Stockholders' Equity Accounts Cash $ 19 D Accounts payable $ 59 I Accounts receivable $ 23 1 Accrued
2 Asset and Contra-Asset Accounts Liabilities and Stockholders' Equity Accounts Cash $ 19 D Accounts payable $ 59 I Accounts receivable $ 23 1 Accrued liabilities 23 D Inventory $ 56 D Income taxes payable $ 28 1 Prepaid expenses $ 18 1 Bonds payable $ 196 1 Long-term investments $ 20 D Common stock 92 D Property, plant, and equipment $ 380 I Retained earnings $ 79 1 oints Accumulated depreciation $ 79 1 D = Decrease: I = Increase. Long-term investments that cost the company $20 were sold during the year for $44 and land that cost $43 was sold for $23. In addition, the company declared and paid $17 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: Sales $ 998 Cost of goods sold 432 Gross margin 558 Selling and administrative expenses 410 Net operating income 148 Nonoperating items: Loss on sale of land $ (20) Gain on sale of investments 24 Income before taxes 152 Income taxes 56 Net income $ 96 The company's beginning cash balance was $126 and its ending balance was $107. Required: 1. Use the indirect method to determine the net cash provided by operating activities for the year. 2. Prepare a statement of cash flows for the year.Complete this question by entering your answers in the tabs below. 6 points Required 1 Required 2 Prepare a statement of cash flows for the year (List any deduction in cash and cash outflows as negative amounts.) Pavolik Company Statement of Cash Flows Operating activities: Net cash provided by operating activities 250 Investing activities: Proceeds from sale of long-term investments V S Proceeds from sale of land 23 Additions to long-term investments X Additions to property, plant & equipment 337] x Net cash provided by investing activities X (270) Financing activities: Retirement of bonds payable X Issuance of bonds payable X Purchase of common stock Cash dividends (17) Net cash used in financing activities X 87 Net increase in cash X 67 Beginning cash and cash equivalents 126 Ending cash and cash equivalents S 193N X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use the indirect method to determine the net cash provided by operating activities for the year. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Pavolik Company Statement of Cash Flows (partial) Net income Adjustments to convert net income to a cash basis: Depreciation S 79 Increase in accounts receivable (23) Decrease in inventory 56 Increase in prepaid expenses Increase in accounts payable Decrease in accrued liabilities (23) Increase in income taxes payable 28 Gain on sale of long-term investments (24) Loss on sale of land 20 154 Net cash provided by operating activities 250
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