Exercise 23-14 Novak Inc., a greeting card company, had the following statements prepared as of December 31, 2017 dy NOVAK INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $5,900 $7,000 Accounts receivable 61,500 51,300 Short-term debt investments (available-for-sale) 35,000 17,800 Inventory 40,400 60,200 Prepaid rent 5,000 4,000 Equipment 153,400 129,000 Accumulated depreciation-equipment (35,100) (25,100) Copyrights 46,300 49,600 Total assets $312,400 $293,800 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,500 4,100 8,100 7,900 60,200 100,000 30,000 55,600 $312,400 $40,200 6,000 4,000 10,000 68,700 100,000 30,000 34,900 $293,800 NOVAK INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit $338,750 176,400 162,350 00 es NOVAK INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,500 Gain on sale of equipment 2,000 Income before tax Income tax expense Net income $338,750 176,400 162,350 119,600 42,750 udy. 9,500 33,250 6,650 $26,600 Additional information: 1. Dividends in the amount of $5,900 were declared and paid during 2017 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2017. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a sign .g.-13 NOVAK INC. Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Financing Activities, Net Income Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Amortization of Copyright Amortization of Copyright Gain on Sale of Equipment Increase in Accounts Receivable Decrease in Inventories Increase in Prepaid Rent Increase in Prepaid Rent Net Cash Used by Investing Activities Cash Flows from Financing Activities Principal Payment on Short-term Loan ! Principal Payment on Short-term Loan ! Cash Flows from Financing Activities : Principal Payment on Short-term Loan Principal Payment on Short-term Loan Dividend Payments Net Cash Provided by Financing Activities Net Decrease in Cash Cash at Beginning of Period Cash at End of Period LINK TO TEXT Question At
