Exercise 5-15 Presented below is a condensed version of the comparative balance sheets for Zubin Mehta...

Exercise 5-15 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 $ 321,432 $ 141,648 Accounts receivable 326,880 335,960 Investments 94,432 134,384 Equipment 541,168 435,840 Accumulated Depreciation-Equipment (192,496 ) (161,624 ) Current liabilities 243,344 274,216 Common stock 290,560 290,560 Retained earnings 557,512 321,432

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Determine Zubin Mehta Corporation’s free cash flow

Expert Solution

Zubin mehta
Cash Flow Statement
For the end of year dec 31 2014
Cash Flow from Operating Activities:
Net Income		$ 236,080.00
Add: Adjustments
Depreciation expense	$ 30,872.00
Decrease in Accounts Payables	$ 9,080.00
Decrease in Current liabilities	$ (30,872.00)
		$ 9,080.00
A. Cash Flow from Operating Activities		$ 245,160.00

Cash Flow from Investing Activities:
Sale of Investments	$ 39,952.00
Purchase of Equipment	$(105,328.00)
B. Cash flow from Investing Activities		$ (65,376.00)

C. Cash Flow from Financing Activities		$ -

Increase (Decrease) in cash [A+B+C]		$ 179,784.00
Add: cash at the beginning of the year		$ 141,648.00
Cash at the end of the year		$ 321,432.00

Free Cash Flow

Operating Cash flow - Cash used in Investing Activities

($245160-65376)

$ 179,784.00

ekkarill92 answered 2 years ago

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