Question

The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is shown as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 3 Cash $626,170.00 $585,760.00 4 Accounts receivable (net) 227,840.00 208,880.00 5 Inventories 641,390.00 616,790.00 6 Investments 0.00 240,820.00 7 Land 327,380.00 0.00 8 Equipment 704,290.00 554,020.00 9 Accumulated depreciation-equipment (167,160.00) (148,930.00) 10 Total assets $2,359,910.00 $2,057,340.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable $424,670.00 $404,080.00 13 Accrued expenses payable 43,080.00 52,050.00 14 Dividends payable 24,920.00 19,300.00 15 Common stock, $4 par 140,000.00 102,000.00 16 Paid-in capital: Excess of issue price over par—common stock 417,400.00 280,600.00 17 Retained earnings 1,309,840.00 1,199,310.00 18 Total liabilities and stockholders’ equity $2,359,910.00 $2,057,340.00 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: A. The investments were sold for $279,890 cash. B. Equipment and land were acquired for cash. C. There were no disposals of equipment during the year. D. The common stock was issued for cash. E. There was a $206,210 credit to Retained Earnings for net income. F. There was a $95,680 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required. Labels and Amount Descriptions Cash used for dividends Cash used for merchandise Cash used for purchase of equipment Cash used for purchase of land Cash received from customers Cash from sale of common stock Cash from sale of investments December 31, 20Y3 Decrease in accounts payable Decrease in accounts receivable Decrease in accrued expenses payable Decrease in inventories Decrease in cash Depreciation For the Year Ended December 31, 20Y3 Gain on sale of investments Increase in accounts payable Increase in accounts receivable Increase in accrued expenses payable Increase in cash Increase in inventories Loss on sale of investments Net cash flow from operating activities Net cash flow used for operating activities Net cash flow from investing activities Net cash flow used for investing activities Net cash flow from financing activities Net cash flow used for financing activities Net income Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required. Navaria Inc. Statement of Cash Flows (Label) 1 Cash flows from operating activities: 2 3 Adjustments to reconcile net income to net cash flow from operating activities: 4 5 6 Changes in current operating assets and liabilities: 7 8 9 10 11 12 13 Cash flows from (used for) investing activities: 14 15 16 17 18 19 Cash flows from (used for) financing activities: 20 21 22 23 24 Cash at the beginning of the year 25 Cash at the end of the year

Answer 1

Cash flow statement

Cash flow from operating activities:
Net income	$206210
adjustments to reconcile net income to cash flow from operating activities:
Gain on sale of investments	-39070
Depreciation	18230
changes in current operating assets and liabilities:
increase in accounts recievable	-18960
increase in inventories	-24600
increase in accounts payable	20590
decrease in accrued expenses payable	-8970
net cash flow from operating activities		$153430
cash flows from investing activities:
cash received from sale of investments	279890
cash paid for purchase of land	-327380
cash paid for purchse of equipment	-150270
net cash flow used for investing activities		-197760
cash flows from financing activities:
cash received from sale of common stock	174800
cash paid for dividends (19300+95680-24920)	-90060
net cash flow from financing activities		84740
change in cash		40410
cash at the beginning of the year		585760
cash at the end of the year		$626170