A comparative balance sheet for Rocker Company appears below: Additional information:
1. Net income for the year ending December 31 2017 was $35000.
2. Cash dividends of $15000 were declared and paid during the year.
3. Long-term investments that had a cost of $17000 were sold for $14000.
4. Sales for 2017 were $120000.
Instructions
Prepare a statement of cash flows for the year ended December 31 2017 using the indirect method.

Question

A comparative balance sheet for Rocker Company appears below:

Additional information:
1. Net income for the year ending December 31 2017 was $35000.
2. Cash dividends of $15000 were declared and paid during the year.
3. Long-term investments that had a cost of $17000 were sold for $14000.
4. Sales for 2017 were $120000.
Instructions
Prepare a statement of cash flows for the year ended December 31 2017 using the indirect method.

Clara Unruh · Accepted Answer

Final Answer :   Cash flows from investing activities   Sale of long-term investments  14 , 000 Purchase of equipment  ( 27 , 000 )  Net cash used by investing activities ( 13 , 000 )  Cash flows from financing activities  Issuance of common stock  17 , 000  Retirement of bonds payable  ( 9 , 000 )  Payment of cash dividends ( 15 , 000 )  Net cash used by financing activities  ( 17 , 000 )  Net increase in cash  23 , 000  Cash at beginning of period  11 , 000 Cash at end of period  $ 34 , 000 \begin{array}{llr}  	ext { Cash flows from investing activities }  & \ 	ext { Sale of long-term investments }  & 14,000\ 	ext {Purchase of equipment  }  & (27,000)\ 	ext {  Net cash used by investing activities}  & & (13,000)\ 	ext { Cash flows from financing activities }  & \ 	ext {Issuance of common stock  }  & 17,000\ 	ext { Retirement of bonds payable }  & (9,000)\ 	ext {  Payment of cash dividends}  & (15,000)\ 	ext { Net cash used by financing activities }  & & (17,000)\ 	ext { Net increase in cash }  & & 23,000\ 	ext { Cash at beginning of period }  & & 11,000\	ext {Cash at end of period  }  & & \$34,000\\end{array}  Cash flows from investing activities   Sale of long-term investments  Purchase of equipment   Net cash used by investing activities  Cash flows from financing activities  Issuance of common stock   Retirement of bonds payable   Payment of cash dividends  Net cash used by financing activities   Net increase in cash   Cash at beginning of period  Cash at end of period  ​ 14 , 000 ( 27 , 000 ) 17 , 000 ( 9 , 000 ) ( 15 , 000 ) ​ ( 13 , 000 ) ( 17 , 000 ) 23 , 000 11 , 000 $34 , 000 ​

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