The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2013
ID: 2700491 • Letter: T
Question
The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2013 and 2012, is shown as follows:
Dec. 31, 2013 Dec. 31, 2012
Assets
Cash $255,230 $235,240
Accounts receivable (net) 92,460 84,490
Inventories 261,020 250,150
Investments 0 96,910
Land 133,880 0
Equipment 287,980 221,160
Accumulated depreciation-equipment (67,420) (59,640)
Total $963,150 $828,310
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $174,330 $163,180
Accrued expenses payable (operating expenses) 17,340 21,540
Dividends payable 9,630 7,450
Common stock, $10 par 52,010 40,590
Paid-in capital in excess of par-common stock 195,520 112,650
Retained earnings 514,320 482,900
Total $963,150 $828,310
The following additional information was taken from the records:
The investments were sold for $113,380 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 $70,350 credit to Retained Earnings for net income.
There was a $38,930 debit to Retained Earnings for cash dividends declared.
Instructions:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use a minus sign to indicate cash outflows, negative amounts or a decrease in cash.
Explanation / Answer
Cashflows from operating activities:
Net income: 70,350
Adjustments:
Depreciation: 7,780
Gain in sale of investments: -16,470
Increase in accounts receivable: -7,970
Increase in inventories: -10,870
Increase in accounts payable: 11,150
Decrease in accrued expenses payable: -4,200
Total cash from operating activities: 49,770
Cashflows from investing activities:
Cash from sale of investments: 113,380
Cash towards purchase of land: -133,880
Cash towards purchase of equipment: -66,820
Total cash from investing activities: -87,320
Cashflows from financing activities:
Cash from issue of stock: 94,290
Cash dividends paid: -36,750
Total cash from financing activities: 57,540
Total cash from operations = 49,770-87,320+57,540 = 19,990
Beginning cash = 235,240
Ending cash = 235,240+19,990 = 255,230