Problem 4: (20 points Here are comparative balance sheets for Novak Corp Novak C

Question

Problem 4: (20 points Here are comparative balance sheets for Novak Corp Novak Corp December 31 Cash Accounts receivable Inventory Land Equipment 72,500 88,500 189,600 73,700 259,200 (66,000) $595,500 $ 32,600 71400 187,300 101,900 200,200 (33,500) $558,900 Accumulated depreciation-equipment Total Liabilities and Stockholders' Equity $35,200 150,200 214,100 196,000 $48,700 Accounts Payable Bonds Payable Common stock ($1 par) Retained eamings 203,700 176,000 133,500 $595,500S $559,900 Total Additional information: 1. Net income for 2017 was $102,500. 2. Cash dividends of $40,000 were declared and paid. 3. Bonds payable amounting to $53,500 were redeemed for cash $53,500. 4. Common stock was issued for $38,100 cash. 5. No equipment was sold during 2017, but land was sold at cost. ag Prepare a statement of cash flows for 2017 using the indirect method. A template is on the next p

Explanation / Answer

Cash Flow statement cash flow from operating activity Net Income 102500 Add:adjustment to reconcile net income to net cash provided by operating activity Depreciation [66000-33500] 32500 Increase in accounts receivable [86500-71400] (15100) Decrease in inventory [169600-187300] 17700 decrease in accounts payable [46700-35200] (11500) 23600 net cash flow from operating acivity [A] 126100 CASH Flow from investing activity sale of land [101900-73700] 28200 purchase of equipment [259200-200200] (59000) net cash used by investing activity (30800) cash flow from financing activity cash dividend (40000) Redemption of bond (53500) common stock issued 38100 net cash used by financing acivity (55400) net increase /(decrease ) in cash 39900 Beginning casg 32600 cash at end 72500

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