The following changes took place last year in Pavolik Companys balance sheet accounts:

Asset and Contra-Asset Accounts	Liabilities and Stockholders' Equity Accounts
Cash	$ 32	D	Accounts payable	$ 98	I
Accounts receivable	$ 36	I	Accrued liabilities	$ 36	D
Inventory	$ 82	D	Income taxes payable	$ 41	I
Prepaid expenses	$ 31	I	Bonds payable	$ 300	I
Long-term investments	$ 33	D	Common stock	$ 144	D
Property, plant, and equipment	$ 575	I	Retained earnings	$ 118	I
Accumulated depreciation	$ 118	I

D = Decrease; I = Increase.

Long-term investments that cost the company $33 were sold during the year for $70 and land that cost $69 was sold for $36. In addition, the company declared and paid $30 in cash dividends during the year. Besides the sale of land, no other sales or retirements 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 companys income statement for the year follows:

Sales		$ 1,380
Cost of goods sold		614
Gross margin		766
Selling and administrative expenses		540
Net operating income		226
Nonoperating items:
Loss on sale of land	$ (33)
Gain on sale of investments	37	4
Income before taxes		230
Income taxes		82
Net income		$ 148

The companys beginning cash balance was $152 and its ending balance was $120.

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.

Answer rating: 100% (QA)

1 Net cash provided by operating activities indirect method Net income 148 Adjustments to reconcile ... View the full answer