Additional data obtained from an examination of the accounts in the ledger for 2

Question

Additional data obtained from an examination of the accounts in the ledger for 2014 are as follows:

Equipment and land were acquired for cash.

There were no disposals of equipment during the year.

The investments were sold for $588,000 cash.

The common stock was issued for cash.

There was a $528,000 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, and decreases in cash.

Martinez Inc.

Statement of Cash Flows

For the Year Ended December 31, 2014

Cash flows from operating activities:

  

$  

  

$  

  

  

  

  

  

Net cash flow from operating activities

$  

Cash flows from investing activities:

  

$  

  

$  

  

  

  

Net cash flow used for investing activities

  

Cash flows from financing activities:

  

$  

  

  

Net cash flow provided by financing activities

  

  

$  

Cash at beginning of the year

  

Cash at end of the year

$  

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Hint(s)

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, and decreases in cash.

Martinez Inc.

Statement of Cash Flows

For the Year Ended December 31, 2014

Cash flows from operating activities:

  

$  

  

$  

  

  

  

  

  

Net cash flow from operating activities

$  

Cash flows from investing activities:

  

$  

  

$  

  

  

  

Net cash flow used for investing activities

  

Cash flows from financing activities:

  

$  

  

  

Net cash flow provided by financing activities

  

  

$  

Cash at beginning of the year

  

Cash at end of the year

$  

Explanation / Answer

STATEMENT OF CASH FLOWS Cash flow from operating activities: cash received from accounts receivable 4433760 cash paid to suppliers -2269200 cash paid for expenses -1356240 income taxes paid -299100 Net cash flow provided by operating activities 509220 Cash flow from investing activities: purchase of land -960000 sale of investment 588000 purchase of equipment -240000 Net cash used by investing activities -612000 Cash flow from financing activities: cash dividends paid -518400 common stock issued 600000 Net cash flow provided by financing activities 81600 Net increase in cash and cash equivalents -21180 Cash & cash equivalents at the beginning of the year 683100 Cash & cash equivalents at the end of the year 661920

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