20) Marks Corporation\'s balance sheet appears below Comparative Balance Sheet B

Question

20) Marks Corporation's balance sheet appears below Comparative Balance Sheet Beginning Balance Ending Balance Assets: Cash and cash equivalents Accounts receivable S37 57 60 440 255 $47 53 63 548 295 Inventory Property, plant and equipment Less accumulated depreciation Total assets $416 $339 Liabilities and stockholders' equity: Accounts payable Bonds payable $52 260 51 $50 250 Common stock 50 Retained earnings 53 Total liabilities and stockholders' equity $416 $339 Net income for the year was $77. Cash dividends were $13. The company did not dispose of any property, plant, and equipment, retire any bonds payable, or repurchase any of its own common stock during the year.

Explanation / Answer

Statement of cash flow indirect method :

Cash flow from operating activities Net income 77 Adjustment to reconcile net income Depreciation expenses 40 Decrease account receivable 4 Increase inventory (3) Increase account payable 2 Net cash flow from operating activities 120 Cash flow from investing activities Purchase of equipment (108) Net cash flow from investing activities (108) Cash flow from financing activities Issue bonds payable 10 Issue common stock 1 Dividend paid (13) Net cash flow from financing activities (2) Net cash flow 10 Beginning cash 37 Ending cash 47

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