Presented below is a condensed version of the comparative balance sheets for Zub

Question

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 $ 418,074 $ 184,236 Accounts receivable 425,160 436,970 Investments 122,824 174,788 Equipment 703,876 566,880 Accumulated Depreciation-Equipment (250,372 ) (210,218 ) Current liabilities 316,508 356,662 Common stock 377,920 377,920 Retained earnings 725,134 418,074
Additional information:

Investments were sold at a loss (not extraordinary) of $23,620; no equipment was sold; cash dividends paid were $70,860; and net income was $377,920. 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 $ 418,074 $ 184,236 Accounts receivable 425,160 436,970 Investments 122,824 174,788 Equipment 703,876 566,880 Accumulated Depreciation-Equipment (250,372 ) (210,218 ) Current liabilities 316,508 356,662 Common stock 377,920 377,920 Retained earnings 725,134 418,074
Additional information:

Investments were sold at a loss (not extraordinary) of $23,620; no equipment was sold; cash dividends paid were $70,860; and net income was $377,920. 2014 2013 Zubin Mehta Corporation
Statement of Cash Flows
For the Year Ended December 31, 2014 Adjustments to reconcile net income to Link to Text Link to Text Link to Text 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 $ 418,074 $ 184,236 Accounts receivable 425,160 436,970 Investments 122,824 174,788 Equipment 703,876 566,880 Accumulated Depreciation-Equipment (250,372 ) (210,218 ) Current liabilities 316,508 356,662 Common stock 377,920 377,920 Retained earnings 725,134 418,074
Additional information:

Investments were sold at a loss (not extraordinary) of $23,620; no equipment was sold; cash dividends paid were $70,860; and net income was $377,920.

Explanation / Answer

Cash Flow Statement (Indirect Method) Cash flows from operating activities Net Income $   3,77,920 Adjustments for: Depreciation and Amortaization (250372-210218) $      40,154 Loss on Sale of Investment $      23,620 Decrease in Trade Receiveble $      11,810 Decrease in Current Liabilities $     -40,154 $      35,430 Cash Generated from Operations $   4,13,350 Cash flows from investing activities Purchase of property, plant, and equipment $ -1,36,996 Sale of Investments $      28,344 Net cash used in investing activities $ -1,08,652 Cash flows from financing activities Dividends Paid $     -70,860 Net cash used in financing activities $     -70,860 Net increase in cash and cash equivalents $   2,33,838 Cash and cash equivalents at beginning of period $   1,84,236 Cash and cash equivalents at end of period $   4,18,074

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