Answered

Connect with a global community of knowledgeable individuals on IDNLearn.com. Join our interactive Q&A community and access a wealth of reliable answers to your most pressing questions.

The following is a condensed version of the comparative balance sheets for Sweet Corporation for the last two years at December 31.

2020 2019
Cash $274,350 $120,900
Accounts receivable 279,000 286,750
Investments 80,600 114,700
Equipment 461,900 372,000
Accumulated Depreciation-Equipment (164,300 ) (137,950 )
Current liabilities 207,700 234,050
Common stock 248,000 248,000
Retained earnings 475,850 274,350

Additional information:

Investments were sold at a loss of $22,000; no equipment was sold; cash dividends paid were $66,000; and net income was $352,000.

Required:
a. Prepare a statement of cash flows for 2020 for Shira Corporation.
b. Determine Shira Corporation’s free cash flow.

Sagot :

Tundexiidn

Answer:

Cash flow from operating activities

Net income                                                      $352,000

Adjustment to reconcile net income to

net Cash flow from operating activities

Depreciation expense                                    $26,350

Loss on investment sold                                 $15,500

Decrease account receivable                         $7,750

Decrease current liabilities                            -$26,350

Net cash flow from operating activities                              $348,250

Cash flow from investing activities

Sale of investment                                           $12,100

Purchase of equipment                                 -$89,900

Net cash used investing activities                                       -$77,800

Cash flow from financing activities

Dividend paid                                                  -$66,000  

Net cash used financing activities                                       -$66,000

Net cash increase (decrease)                                              $204,450

Beginning Cash                                                                     $120,900

Ending Cash                                                                          $325,350

We greatly appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Your search for solutions ends here at IDNLearn.com. Thank you for visiting, and come back soon for more helpful information.