Exercise 23-14 Riverbed Inc., a greeting card company, had the following stateme
ID: 2529306 • Letter: E
Question
Exercise 23-14
Riverbed Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
RIVERBED INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
$5,900
$7,000
62,000
51,500
34,700
17,900
39,700
60,400
4,900
4,100
154,300
130,500
(35,300
)
(25,200
)
45,600
49,700
$311,800
$295,900
$46,200
$40,400
4,000
6,000
8,100
3,900
8,000
9,900
60,200
69,300
100,000
100,000
30,000
30,000
55,300
36,400
$311,800
$295,900
RIVERBED INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
$335,600
174,600
161,000
120,700
40,300
$11,400
2,100
9,300
31,000
6,200
$24,800
Additional information:
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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RIVERBED INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
Cash$5,900
$7,000
Accounts receivable62,000
51,500
Short-term debt investments (available-for-sale)34,700
17,900
Inventory39,700
60,400
Prepaid rent4,900
4,100
Equipment154,300
130,500
Accumulated depreciation—equipment(35,300
)
(25,200
)
Copyrights45,600
49,700
Total assets$311,800
$295,900
Accounts payable$46,200
$40,400
Income taxes payable4,000
6,000
Salaries and wages payable8,100
3,900
Short-term loans payable8,000
9,900
Long-term loans payable60,200
69,300
Common stock, $10 par100,000
100,000
Contributed capital, common stock30,000
30,000
Retained earnings55,300
36,400
Total liabilities & stockholders’ equity$311,800
$295,900
Explanation / Answer
RIVERBED INC Statement of Cashflows For the year Ended December 31, 2017 Cash flows from operating activities Net Income $ 24,800 Adjustments to reconcile net income to : Depreciation expense $ 23,960 35300-25200+(19800*70%) Gain on sale of equipment $ (2,100) Amortization expense $ 4,100 49700-45600 Changes in current operating assets and liabiltiies Increase in accounts receivable $ (10,500) 51500-62000 Decrease in inventory $ 20,700 60400-39700 Increase in prepaid rent $ (800) 4100-4900 Increase in accounts payable $ 5,800 46200-40400 Decrease in income tax payable $ (2,000) 4000-6000 Increase in salaries and wages payable $ 4,200 8100-3900 $ 43,360 Net cash flow from operating activities $ 68,160 Cash flows from investing activities Cash paid for Purchase of equipment $ (43,600) 130500-154300-19800 Cash received from sale of equipment $ 8,040 19800-(19800*70%)+2100 Cash paid for purchase of investment $ (16,800) 17900-34700 Net cash used for investing activities $ (52,360) Cash flows from financing activities Repayment of short term loan $ (1,900) 8000-9900 Repayment of long term loan $ (9,100) 60200-69300 Cash paid for dividends $ (5,900) Net cash flow used by financing activities $ (16,900) Net increase in cash and cash equivalents $ (1,100) Cash and cash equivalents at beginning of period $ 7,000 Cash and cash equivalents at end of period $ 5,900
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