Question

Exercise 23B-17

Pina Inc., had the following condensed balance sheet at the end of operations for 2016.

PINA INC. BALANCE SHEET DECEMBER 31, 2016
Cash		$8,500		Current liabilities		$14,900
Current assets other than cash		29,200		Long-term notes payable		25,400
Equity invesments		19,900		Bonds payable		25,000
Plant assets (net)		68,200		Common stock		75,000
Land		39,700		Retained earnings		25,200
		$165,500				$165,500

During 2017, the following occurred.

1.		A tract of land was purchased for $8,900.
2.		Bonds payable in the amount of $15,000 were redeemed at par.
3.		An additional $10,000 in common stock was issued at par.
4.		Dividends totaling $9,400 were paid to stockholders.
5.		Net income was $30,200 after allowing depreciation of $13,600.
6.		Land was purchased through the issuance of $22,600 in bonds.
7.		Pina Inc. sold part of its investment portfolio for $12,700. This transaction resulted in a gain of $2,000 for the company. No unrealized gains or losses were recorded on these investments in 2017.
		8.Both current assets (other than cash) and current liabilities remained at the same amount. Prepare a statement of cash flows for 2017 using the indirect method. Prepare the condensed balance sheet for Pina Inc. as it would appear at December 31, 2017

Answer 1

PINA INC.
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows from Operating Activities:
Net income		30200
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	13600
Gain on sale of investments	-2000	11600
Net cash provided by operating activities		41800
Cash Flows from Investing Activities:
Sale proceeds from investments	12700
Purchase of land	-8900
Net cash provided by investing activities		3800
Cash Flows from Financing Activities
Issuance of common stock	10000
Redemption of bonds payable	-15000
Payment of cash dividends	-9400
Net cash used by financing activities		-14400
Net increase (decrease) in cash		31200
Cash balance, December 31, 2016		8500
Cash balance, December 31, 2017		39700
Non-cash investing and financing activities: Land purchased by issuance of bonds payable of $22600.

PINA INC.
Balance Sheet
December 31, 2017
Cash	39700	Current liabilities	14900
Current assets other than cash	29200	Long-term notes payable	25400
Equity investments [19900 - (12700 - 2000)]	9200	Bonds payable (25000 - 15000 + 22600)	32600
Plant assets (net) (68200 - 13600)	54600	Common stock (75000 + 10000)	85000
Land (39700 + 8900 + 22600)	71200	Retained earnings (25200 + 30200 - 9400)	46000
	203900		203900