The comparative balance sheets for Novak Corporation show the following information. December 31 2020 2019 Cash...

  

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The comparative balance sheets for Novak Corporation show the following information. December 31 2020 2019 Cash $33,700 $13,200 Accounts receivable 12,100 9,900 Inventory 12,000 9,100 Available-for-sale debt investments -0- 3,000 Buildings -0- 29,500 Equipment 45,000 19,800 Patents 5,000 6,100 $107,800 $90,600 Allowance for doubtful accounts $3,100 $4,500 Accumulated depreciation-equipment 2,000 4,500 Accumulated depreciation-building -0- 6,100 Accounts payable 5,000 3,000 Dividends payable -0- 4,900 Notes payable, short-term (nontrade) 2,900 4,000 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings 20,800 5,600 $107,800 $90,600 Additional data related to 2020 are as follows. 1. Equipment that had cost $11,100 and was 40% depreciated at time of disposal was sold for $2,500. 2. $10,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $4,900. On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,200 (net of $2,100 taxes). 4. Debt investments (available-for-sale) were sold at $1,800 above their cost. The company has made similar sales and investments in the past. 5. 6. Cash was paid for the acquisition of equipment. 7. A long-term note for $16,000 was issued for the acquisition of equipment. 8. Interest of $2,000 and income taxes of $6,400 were paid in cash. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) NOVAK CORPORATION Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income $ 15200 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 3040 Loss on Sale of Equipment 4160 Gain from Flood Damage -6800 Gain on Sale of Investments -1800 Increase in Accounts Payable 2000 Increase in Accounts Receivable (Net) -3600 Increase in Inventory -2900 Patent Amortization 1100 -5900 Net Cash Provided by Operating Activities 930 %24 %24 Cash Flows from Investing Activities Purchase of Equipment -36300 Sale of Equipment 2500 Proceeds from Flood Damage to Building 30200 Sale of Investments 4800 Net Cash Provided by Investing Activities 1200 Cash Flows from Financing Activities Payment of Dividends -4900 16000 Net Cash Used by Financing Activities 11100 Net Increase in Cash 20500 Cash, January 1, 2020 13200 Cash, December 31, 2017 33700 Supplemental disclosures of cash flow information: Retired Notes Payable by Issuing Common Stock v 10000 Purchased Equipment by Issuing Notes Payable v 16000 %24 %24 %24 > > > > > > The comparative balance sheets for Novak Corporation show the following information. December 31 2020 2019 Cash $33,700 $13,200 Accounts receivable 12,100 9,900 Inventory 12,000 9,100 Available-for-sale debt investments -0- 3,000 Buildings -0- 29,500 Equipment 45,000 19,800 Patents 5,000 6,100 $107,800 $90,600 Allowance for doubtful accounts $3,100 $4,500 Accumulated depreciation-equipment 2,000 4,500 Accumulated depreciation-building -0- 6,100 Accounts payable 5,000 3,000 Dividends payable -0- 4,900 Notes payable, short-term (nontrade) 2,900 4,000 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings 20,800 5,600 $107,800 $90,600 Additional data related to 2020 are as follows. 1. Equipment that had cost $11,100 and was 40% depreciated at time of disposal was sold for $2,500. 2. $10,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $4,900. On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,200 (net of $2,100 taxes). 4. Debt investments (available-for-sale) were sold at $1,800 above their cost. The company has made similar sales and investments in the past. 5. 6. Cash was paid for the acquisition of equipment. 7. A long-term note for $16,000 was issued for the acquisition of equipment. 8. Interest of $2,000 and income taxes of $6,400 were paid in cash. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) NOVAK CORPORATION Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income $ 15200 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 3040 Loss on Sale of Equipment 4160 Gain from Flood Damage -6800 Gain on Sale of Investments -1800 Increase in Accounts Payable 2000 Increase in Accounts Receivable (Net) -3600 Increase in Inventory -2900 Patent Amortization 1100 -5900 Net Cash Provided by Operating Activities 930 %24 %24 Cash Flows from Investing Activities Purchase of Equipment -36300 Sale of Equipment 2500 Proceeds from Flood Damage to Building 30200 Sale of Investments 4800 Net Cash Provided by Investing Activities 1200 Cash Flows from Financing Activities Payment of Dividends -4900 16000 Net Cash Used by Financing Activities 11100 Net Increase in Cash 20500 Cash, January 1, 2020 13200 Cash, December 31, 2017 33700 Supplemental disclosures of cash flow information: Retired Notes Payable by Issuing Common Stock v 10000 Purchased Equipment by Issuing Notes Payable v 16000 %24 %24 %24 > > > > > >

Answer rating: 100% (QA)

Calculation Sale of Equipment Book Value of Equipment on the date of Sale 11100 11100 40Book Value o... View the full answer