Question

The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2016 and 2015, is shown as follows: Dec. 31, 2016 Dec. 31, 2015 Assets Cash $246,710 $230,820 Accounts receivable (net) 89,380 82,900 Inventories 252,290 245,460 Investments 0 95,090 Land 129,410 0 Equipment 278,370 217,000 Accumulated depreciation—equipment (65,170) (58,520) Total $930,990 $812,750 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $168,510 $160,110 Accrued expenses payable (operating expenses) 16,760 21,130 Dividends payable 9,310 7,310 Common stock, $10 par 50,270 39,820 Paid-in capital: Excess of issue price over par-common stock 188,990 110,530 Retained earnings 497,150 473,850 Total $930,990 $812,750 The following additional information was taken from the records: The investments were sold for $111,260 cash. Equipment and land were acquired for cash. There were no disposals of equipment during the year. The common stock was issued for cash. There was a $61,500 credit to Retained Earnings for net income. There was a $38,200 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Mavenir Technologies Inc. Statement of Cash Flows For the Year Ended December 31, 2016 Cash flows from operating activities: Net income $ Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities $ Cash flows from investing activities: Cash received from sale of investments $ Less cash paid for purchase of land $ Less cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from financing activities: Cash received from sale of common stock $ Less cash paid for dividends Net cash flow from financing activities Increase in cash $ Cash at beginning of the year Cash at end of the year $

Answer 1

Solution:

Mavenir Technologies Inc.
Statement of Cash Flows
For the year ended Dec 31, 2016
Particulars	Details	Amount
Cash Flow from Operating Activities:
Net Income	$61,500.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation ($65,170,$58,520)	$6,650.00
Gain on sale of investments ($111,260 - $95,090)	-$16,170.00
Changes in current operating assets and liabilities:
Increase in accounts receivables ($89,380 - $82,900)	-$6,480.00
Increase in inventories ($252,290 - $245,460)	-$6,830.00
Increase in accounts payable ($168,510 - $160,110)	$8,400.00
Decrease in accrued expenses payable ($21,130 - $16,760)	-$4,370.00
Net cash flow from operating activities		$42,700.00
Cash Flow from Investing Activities:
Cash received from sale of investments	$111,260.00
Cash paid for purchase of land	-$129,410.00
cash paid for purchase of equipment	-$61,370.00
Net cash flow used for investing activities		-$79,520.00
Cash Flow from Financing Activities:
Cash received from sale of common stock ($50,270 + $188,990 - $39,820 - $110,530)	$88,910.00
cash paid for dividends ($7,310 +$38,200 - $9,310)	-$36,200.00
Net cash flow from financing activities		$52,710.00
Increase in Cash		$15,890.00
Cash at beginning of the year		$230,820.00
Cash at end of year		$246,710.00