Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE HELP ME. Assignment due soon and stuck. The following changes took place last year in Pavolik Companys balance sheet accounts: Asset and Contra-Asset Accounts

image text in transcribed

PLEASE HELP ME. Assignment due soon and stuck.

The following changes took place last year in Pavolik Companys balance sheet accounts:

Asset and Contra-Asset Accounts Liabilities and Equity Accounts
Cash $ 5 D Accounts payable $ 35 I
Accounts receivable $ 110 I Accrued liabilities $ 4 D
Inventory $ 70 D Income taxes payable $ 8 I
Prepaid expenses $ 9 I Bonds payable $ 150 I
Long-term investments $ 6 D Common stock $ 80 D
Property, plant, and equipment $ 185 I Retained earnings $ 54 I
Accumulated depreciation $ 60 I

D = Decrease; I = Increase.

Long-term investments that had cost the company $6 were sold during the year for $16 and land that had cost $15 was sold for $9. In addition, the company declared and paid $30 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 companys income statement for the year follows:

Sales $ 700
Cost of goods sold 400

Gross margin 300
Selling and administrative expenses 184

Net operating income 116
Nonoperating items:
Loss on sale of land $ (6)
Gain on sale of investments 10 4

Income before taxes 120
Income taxes 36

Net income $ 84

The companys beginning cash balance was $90 and its ending balance was $85.

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 Investing activities: Proceeds from sale of long-term investments Proceeds from sale of land Additions to property, plant & equipment 0 Financing activities: Cash dividends Beginning cash and cash equivalents Ending cash and cash equivalents

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audits

Authors: Arthur E Cutforth

1st Edition

1017097445, 978-1017097443

More Books

Students also viewed these Accounting questions

Question

Explain in detail how the Mughal Empire was established in India

Answered: 1 week ago

Question

Problem: Evaluate the integral: I - -[ze dx

Answered: 1 week ago

Question

1. Organize and support your main points

Answered: 1 week ago

Question

3. Move smoothly from point to point

Answered: 1 week ago

Question

5. Develop a strong introduction, a crucial part of all speeches

Answered: 1 week ago