I am unclear on how I get the Net income using the indirect method for the statement of cash flow using the balance sheet provided below.
Problem 14 1 (Algorithmic)
Statement of Cash Flows”Indirect Method
The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2013 and 2012, is shown as follows:
| Dec. 31, 2013 | Dec. 31, 2012 | ||||
| Assets | |||||
| Cash | $266,160 | $248,160 | |||
| Accounts receivable (net) | 96,420 | 89,130 | |||
| Inventories | 272,190 | 263,880 | |||
| Investments | 0 | 102,240 | |||
| Land | 139,610 | 0 | |||
| Equipment | 300,310 | 233,310 | |||
| Accumulated depreciation equipment | (70,310) | (62,910) | |||
| Total | $1,004,380 | $873,810 | |||
| Liabilities and Stockholders’ Equity | |||||
| Accounts payable (merchandise creditors) | $181,790 | $172,140 | |||
| Accrued expenses payable (operating expenses) | 18,080 | 22,720 | |||
| Dividends payable | 10,040 | 7,860 | |||
| Common stock, $10 par | 54,240 | 42,820 | |||
| Paid in capital in excess of par common stock | 203,890 | 118,840 | |||
| Retained earnings | 536,340 | 509,430 | |||
| Total | $1,004,380 | $873,810 | |||
The following additional information was taken from the records:
- The investments were sold for $119,620 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 $67,980 credit to Retained Earnings for net income.
- There was a $41,070 debit to Retained Earnings for cash dividends declared.
Instructions:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use a minus sign to indicate cash outflows, negative amounts or a decrease in cash. |