Reference no: EM132612360
Problem - The following are selected statement of financial position accounts of Pavicevic Ltd. at December 31, 2016 and 2017, and the increases or decreases in each account from 2016 to 2017. Also presented are the income statement and other information for the year ended December 31, 2017.
Statement of Financial Position (selected accounts) 2017 2016 Increase (Decrease) Assets Accounts receivable $ 84,000 $ 74,000 $10,000 FV-NI investments 41,000 49,000 (8,000) Property, plant, and equipment 177,000 147,000 30,000 Accumulated depreciation (78,000) (67,000) 11,000 Liabilities and shareholders' equity Bonds payable 149,000 146,000 3,000 Dividends payable 8,000 5,000 3,000 Common shares 31,000 22,000 9,000 Retained earnings 104,000 91,000 13,000
Income Statement for the year ended 2017
Sales Revenue $295,000
Gain on sale of FV-NI investments 5,000
Gain on sale of equipment 14,500
Total Income 314,500
COGS 200,000
Operating Expenses 47,500
Depreciation expense 33,000
Unrealized loss on FV-NI investments 3,000
Net income 31,000
Additional information:
1. During 2017, equipment costing $45,000 was sold for cash.
2. Accounts receivable relate to sale of inventory.
3. During 2017, $20,000 of bonds payable were issued in exchange for property, plant, and equipment. All bonds were issued at par.
4. During the year, short-term investments accounted at FV-NI with a carrying amount of $17,000 were sold. Additional investments were purchased.
Required -
1. Prepare cash from operating activities using direct method.
2. Prepare Statement of Cash Flows using direct and indirect method.