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The following changes took place during the year in Pavolik Company's balance sheet accounts: Cash $ 5 D Accounts payable $ 35 Accounts receivable 110
The following changes took place during the year in Pavolik Company's balance sheet accounts: Cash $ 5 D Accounts payable $ 35 Accounts receivable 110 Accrued liabilities A Inventory 70 Bonds payable 150 Prepaid expenses Deferred income taxes liability Long-term investments Common shares 80 D Plant and equipment 200 Retained earnings 54 Accumulated depreciation (60) Land 15 D 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. No sales or retirements of plant and equipment took place during the year. The company's income statement for the year follows: Sales $700 Less: Cost of goods sold 400 Gross margin 300 Less: Operating expenses 184 Net operating income 116D = 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. No sales or retirements of plant and equipment took place during the year. The company's income statement for the year follows: Sales $700 Less: Cost of goods sold 400 Gross margin 300 Less: Operating expenses 184 Net operating income 116 Nonoperating items: Gain on sale of investments $10 Loss on sale of land 6 4 Income before taxes 120 Less: Income taxes 36 Net income $ 84 The company's beginning cash balance was $90, and its ending balance was $85. Required: 1. Use the indirect method to determine the cash provided by operating activities for the year. 2. Prepare a cash flow statement for the year
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