Question

Presented below is a condensed version of the comparative balance sheets for Bramble Corporation for the last two years at December 31. 2017 2016 Cash $178,500 $49,000 Accounts receivable 115,900 76,800 Investments 68,900 98,300 Equipment Accumulated depreciation equipment Current liabilities 350,900 177,300 (95,100) (65,700) 135,300 91,900 142,500 62,500 333,700 173,700 Common stock Retained earnings Additional information: Investments were sold at a gain of $10,300; no investments were purchased; no equipment was sold; cash dividends paid were $43,500; and net income was $203,500.

Answer 1

Bramble Corporation
Statement of Cash Flows (Indirect Method)
For the year ended December 31, 2017
	$	$
Cash Flow from Operating Activities
Net Income	203,500.00
Adjustments to reconcile net income to net cash provided by operations:
Income Statement items not affecting cash;
Depreciation expense (95,100 - 65,700)	29,400.00
Gain on sale of investments	(10,300.00)
Changes in current operating assets and liabilities:
Increase in accounts receivable	(39,100.00)
Increase in current liabilities	43,400.00
Net Cash provided by Operating Activities		226,900.00
Cash Flows from Investing Activities:
Sale of investments [($98,300 – $68,900) + $10,300	39,700.00
Purchase of Equipment	(173,600.00)
Net Cash used in Investing Activities		(133,900.00)
Cash Flows from Financing Activities:
Issuance of common stock	80,000.00
Payment of Cash Dividends	(43,500.00)
Net Cash used in Financing Activities		36,500.00
Net Increase in Cash		129,500.00
Add: Cash balance at the beginning of the year		49,000.00
Cash balance at the end of the year		178,500.00
Free Cash Flow Analysis
Net cash provided by operating activities	226,900.00
Less: Purchase of equipment	(173,600.00)
Dividends	(43,500.00)
Free cash flow	9,800.00