ACCT 301A Exercise 5 16.docx - EXERCISE 5-16(2025 minutes(a...

EXERCISE 5-16 (20–25 minutes)
(a) Shabbona Corporation
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ............................................................... $125,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense ($69,000 - $42, 000) ...... $27,000
Increase in accounts receivable ...................... (16,000)
Decrease in inventory ....................................... 9,000
Decrease in accounts payable ......................... (13,000 ) 7,000
Net cash provided by operating activities ............ 132,000
Cash flows from investing activities
Sale of land .............................................................. 39,000
Purchase of equipment ........................................... (60,000 )
Net cash used by investing activities .................... (21,000)
Cash flows from financing activities
Payment of cash dividends .................................... (60,000 )
Net increase in cash ...................................................... 51,000
Cash at beginning of year ............................................