Question

Please answer! Its due tonight!

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	$625,650.00	$586,340.00
4	Accounts receivable (net)	228,170.00	208,030.00
5	Inventories	641,480.00	617,130.00
6	Investments	0.00	240,290.00
7	Land	328,170.00	0.00
8	Equipment	706,070.00	552,300.00
9	Accumulated depreciation-equipment	(165,580.00)	(147,010.00)
10	Total assets	$2,363,960.00	$2,057,080.00
11	Liabilities and Stockholders’ Equity
12	Accounts payable	$424,300.00	$404,860.00
13	Accrued expenses payable	41,850.00	52,880.00
14	Dividends payable	23,200.00	19,880.00
15	Common stock, $4 par	153,000.00	99,000.00
16	Paid-in capital: Excess of issue price over par—common stock	418,000.00	279,800.00
17	Retained earnings	1,303,610.00	1,200,660.00
18	Total liabilities and stockholders’ equity	$2,363,960.00	$2,057,080.00

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

A.	The investments were sold for $280,680 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 $199,210 credit to Retained Earnings for net income.
F.	There was a $96,260 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.

cash flows—indirect method

Instructions

Labels and Amount Descriptions

Statement of Cash Flows

X

Instructions

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	$625,650.00	$586,340.00
4	Accounts receivable (net)	228,170.00	208,030.00
5	Inventories	641,480.00	617,130.00
6	Investments	0.00	240,290.00
7	Land	328,170.00	0.00
8	Equipment	706,070.00	552,300.00
9	Accumulated depreciation-equipment	(165,580.00)	(147,010.00)
10	Total assets	$2,363,960.00	$2,057,080.00
11	Liabilities and Stockholders’ Equity
12	Accounts payable	$424,300.00	$404,860.00
13	Accrued expenses payable	41,850.00	52,880.00
14	Dividends payable	23,200.00	19,880.00
15	Common stock, $4 par	153,000.00	99,000.00
16	Paid-in capital: Excess of issue price over par—common stock	418,000.00	279,800.00
17	Retained earnings	1,303,610.00	1,200,660.00
18	Total liabilities and stockholders’ equity	$2,363,960.00	$2,057,080.00

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

A.	The investments were sold for $280,680 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 $199,210 credit to Retained Earnings for net income.
F.	There was a $96,260 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.

X

Labels and Amount Descriptions

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

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

X

Statement of Cash Flows

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

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

Navaria Inc.
Statement of Cash Flows
1)	Cash Flows From Operating Activities :
2)	Net Income	$ 199,210
3)	Adjustments to reconcile net income to net cash flow from operating Activities :
4)	Depreciation (147,010 -165,580)	$ 18,570
5)	Gain on sale of Investments (See Note 1 below )	($40,390)
6)	Changes in Current Operating assets and Liabilities
7)	Increase in Accounts Receivable ($208,030 - $228,170 )	($20,140)
8)	Increase in Inventories ($617,130 - $641,480 )	($24,350)
9)	Increase in accounts Payable ($404,860 - $424,300 )	$19,440
10)	Decrease in Accrued expense payable ($52,880 - $41,850 )	($11,030)
11)	Increase in Dividend Payable ($19,880 - $23,200 )	$ 3,320
12)	Net Cash flows from Operating Activities		$ 144,630
13)	Cash Flows From (Used for ) Investing Activities
14)	Cash from sale of Investments (See Note 1 below )	$ 280,680
15)	Cash used for Purchase of Land ( $ 0 - $ 328,170 )	($328,170)
16)	Cash used for Purchase of Equipment ($552,300 -$706,070 )	($153,770)
17)
18)	Net Cash flows used for Investing Activities		($201,260)
19)	Cash Flows From (Used for ) Financing Activities
20)	Cash from sale of Common stock { (99,000+279,800) - (153,000+418,000 )}	$ 192,200
21)	Cash used for Dividends	($96,260)
22)	Net Cash flows used for Financing Activities		$ 95,940
23)	Increase in Cash		$ 39,310
24)	Cash at the Beginning of the Year		$ 586,340
25)	Cash at the End of the Year		$ 625,650

Explanation :
Note 1 :
To Calculate the Gain sale Of investment :
Sale of Investment	$ 280,680
Less: Book Value of Investment	($240,290)
Gain on sale of Investments	$ 40,390