Exercise 177 Rojas Corporations comparative balance sheets a

Exercise 17-7 Rojas Corporation\'s comparative balance sheets are presented below ROJAS CORPORATION Balance Sheets December 31 2017 2016 Cash Accounts recelvable Land Buildings Accumulated depreciation-buildings $15,000 21,400 19,800 70,100 $10,200 23,800 26,400 70,100 (10,800) (15,300) Total $111,000 $119,700 Accounts payable Common stock Retained earnings $12,800 74,600 23,600 $111,000 $27,800 73,400 18,500 Total $119,700 Additional Information: 1. Net income was $22,800. Dividends declared and paid were $17,700 2. No noncash investing and financing activitles occurred during 2017 3. The land was sold for cash of $4,500

Solution

Answer:

ROJAS CORPORATION

Statement of Cash Flows

For the Year Ended December 31, 2017

Cash Flows from Operating Activities

Net income

22800

Adjustments to reconcile net income to

Net Cash Provided by Operating Activities

Depreciation Expense

$4,500

Loss on Disposal of Land (Working Note)

$2,100

Decrease in Accounts Receivable

$2,400

Decrease in Accounts Payable

($15,000)

($6,000)

Net Cash Provided by Operating Activities

$16,800

Cash Flows from Investing Activities

Sale of Land

$4,500

Cash Flows from Financing Activities

Issuance of Common Stock

$1,200

Payment of Dividends

($17,700)

Net Cash Used by Financing Activities<br>

($16,500)

Net Increase in Cash<br>

$4,800

Cash at Beginning of Period<br>

$10,200

Cash at End of Period

$15,000

Working notes for the asnwer:

        Land Account

Particulars

Amount $

Particulars

Amount $

To B/d

$26,400

By Cash account

$4,500

By Income statement a/c   (loss)   

2,100

By Balance C/f

19,800

Total

$26,400

Total

$26,400

______________________________________________

Free cash flow

=16800-17700

=(900)

ROJAS CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows from Operating Activities
Net income		22800
Adjustments to reconcile net income to
Net Cash Provided by Operating Activities
Depreciation Expense	$4,500
Loss on Disposal of Land (Working Note)	$2,100
Decrease in Accounts Receivable	$2,400
Decrease in Accounts Payable	($15,000)
		($6,000)
Net Cash Provided by Operating Activities		$16,800
Cash Flows from Investing Activities
Sale of Land		$4,500
Cash Flows from Financing Activities
Issuance of Common Stock	$1,200
Payment of Dividends	($17,700)
Net Cash Used by Financing Activities<br>		($16,500)
Net Increase in Cash<br>		$4,800
Cash at Beginning of Period<br>		$10,200
Cash at End of Period		$15,000