2014 2013 Prepare a statement of cash flows for 2014 for Zubin Mehta Corporation

Question

2014

2013

Prepare a statement of cash flows for 2014 for Zubin Mehta Corporation.

Presented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31.

2014

2013

Cash $ 353,115 $ 155,610 Accounts receivable 359,100 369,075 Investments 103,740 147,630 Equipment 594,510 478,800 Accumulated Depreciation-Equipment (211,470 ) (177,555 ) Current liabilities 267,330 301,245 Common stock 319,200 319,200 Retained earnings 612,465 353,115
Additional information:

Investments were sold at a loss (not extraordinary) of $19,950; no equipment was sold; cash dividends paid were $59,850; and net income was $319,200.

Explanation / Answer

Zubin Mehta Corporation Cash flow Statement - Indirect Method Year ended December 31, 2014 Working Cash Flow from Operating Activities Net Income $ 3,19,200 Adjustments for: Depreciation $      33,915 2,11,470-1,77,555 Loss on sale of investments $      19,950 Decrease in accounts receiveble $         9,975 3,69,075-3,59,100 Decrease in current liabilities $     -33,915 2,67,330-3,01,245 $     29,925 Net Cash provided by operating activities $ 3,49,125 Cash Flow from Investing Activities Sale of Investment $      23,940 1,47,630-1,03,740-19,950 Purchase of Equipment $ -1,15,710 4,78,800-5,94,510 Net Cash used by Investing Activities $   -91,770 Cash Flow from Financing Activities Payment of Cash Dividend $     -59,850 Net Cash used by Financing Activities $   -59,850 Net Increase in Cash $ 1,97,505 Cash, January 1 $ 1,55,610 Cash, December 31 $ 3,53,115

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