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The following Changes took place last year in Pavolik Company's balance sheet accounts

Required: #1. Use the indirect method to determine the net cash provided by operating activities for the year & # 2 Prepare a statement of cash flows for the year

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The following changes took place last year in Pavolik Company's balance sheet accounts: Asset and Contra-Asset Accounts Cash Accounts receivable Inventory Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation $ 27 D $ 31 I $ 72 D $ 26 I $ 28 D $500 I $103 I Liabilities and Stockholders Accounts payable Accrued liabilities Income taxes payable Bonds payable Common stock Retained earnings Equity Accounts $ 83 I $ 31 D $ 36 1 $260 I $124 D $103 I D = Decrease; 1 = Increase. Long-term investments that cost the company $28 were sold during the year for $60 and land that cost $59 was sold for $31. In addition, the company declared and paid $25 in cash dividends during the year. Besides the sale of land, no other sales or retirement 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 company's income statement for the year follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land $1,230 544 686 490 196 $(28) VYYSE $1, 230 544 686 490 196 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land Gain on sale of investments Income before taxes Income taxes Net income $(28) 32 4 200 72 $ 128 The company's beginning cash balance was $142 and its ending balance was $115. Required: 1. Use the indirect method to determine the net cash provided by operating activities for the year. 2. Prepare a statement of cash flows for the year. Use the Indirect method to determine the net cash provided by operating activities for the year. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) $ 128 Pavolik Company Statement of Cash Flows (partial) Net income Adjustments to convert net income to a cash basis: Depreciation Loss on sale of land Gain on sale of long-term investments Increase in accounts receivable Decrease in inventory Increase in prepaid expenses Increase in accounts payable Decrease in accrued liabilities Increase in income taxes payable 1031 281 (32) (31) 72 (26) 83 (31) 36 202 330 Net cash provided by operating activities $ Required 2 > hom 330 Operating activities: Net cash provided by operating activities Investing activities: Additions to property, plant & equipment Proceeds from sale of long-term investments Proceeds from sale of land (559) 60 31 (468) Net cash provided by investing activities Financing activities: 260 (124) (25) Issuance of bonds payable Purchase of common stock Cash dividends Net cash provided by financing activities Net decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents (27) 142 115 $

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