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ID: 2562855 • Letter: P
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Rodriquez Corporation's comparative balance sheets are presented below RODRIQUEZ CORPORATION Comparative Balance Sheets December 31 Cash Accounts receivable Investments Equipment Accumulated depreciation-equipment 2017 $16,900 24,900 20,250 59,750 (14,150 $107,650 2016 $17,300 22,100 16,050 69,850 )(10,500 ) Total $114,800 Accounts payable Bonds payable Common stock Retained earnings $14,850 11,000 49,900 31,900 $107,650 $11,250 30,200 45,200 28,150 $114,800 Total Additional information: 1. Net income was $18,250. Dividends declared and paid were $14,500 2. Equipment which cost $10,100 and had accumulated depreciation of $1,700 was sold for $3,600 3. No noncash investing and financing activities occurred during 2017.Explanation / Answer
Statement of Cash Flows AS ON DECEMBER 31 Amount in $ Amount in $ Net income $ 18,250.00 Cash flows from operating activities Adjustments for: Depreciation $ 5,350.00 Loss on sale of Equipment $ 4,800.00 (Increase) / Decrease in Account receivables $ -2,800.00 Inventory Decrease / (Increase) Prepaid Expenses Accrued Liabilities Accounts payable Increase / ( Decrese) $ 3,600.00 Net cash from operating activities $ 10,950.00 Cash flows from investing activities Investment $ -4,200.00 Purcahse of Fixed Assets Sales of Equipment $ 3,600.00 Net cash used in investing activities $ -600.00 Cash flows from Financing activities Purchase of Treasury Stock Dividend Paid $ -14,500.00 Bonds Redeemed $ -19,200.00 Issue of Common Stock $ 4,700.00 Net cash used in financing activities $ -29,000.00 Net increase in cash and cash equivalents $ -400.00 Add :Cash and cash equivalents at beginning of period $ 17,300.00 Cash and cash equivalents at end of period $ 16,900.00 Free Cash Flow = Cash Flow from operating Activity - Investment in Capital Assets Free Cash Flow = $ 18,250+ 10,950- ( - $ 3600) Free Cash Flow = $ 32,800 CALCULATION OF LOSS ON SALE Book Value of the Equipment = $ 10,100.00 Less: Depreciation $ 1,700.00 Book Value of the Equipment = $ 8,400.00 Less: Sales Value = $ 3,600.00 Loss on sale= $ 4,800.00