Question
The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2010 and 2009, is shown as follows: The following additional information was taken from the records: The investments were sold for $140,000 cash. Equipment and land were acquired for cash. There were no disposals of equipment during the year, The common stock was issued for cash. There was a $75,520 credit to Retained Earnings for net income. There was a $48,000 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
Explanation / Answer
Net Income $75,520 Adjustments made: Depreciation $9,200 Gain on Sale of Investments ($20,000) Increase in Inventory ($12,320) Increase in Account receivable ($9,440) Increase in Creditor $11,760 Decerase in Accrued Expenses ($5,200) Cash flows from Operating activities $49,520 Net Income $75,520 Adjustments made: Depreciation $9,200 Gain on Sale of Investments ($20,000) Increase in Inventory ($12,320) Increase in Account receivable ($9,440) Increase in Creditor $11,760 Decerase in Accrued Expenses ($5,200) Cash flows from Operating activities $49,520 Net Income $75,520 Adjustments made: Depreciation $9,200 Gain on Sale of Investments ($20,000) Increase in Inventory ($12,320) Increase in Account receivable ($9,440) Increase in Creditor $11,760 Decerase in Accrued Expenses ($5,200) Cash flows from Operating activities $49,520