Question

Current Attempt in Progress The comparative balance sheets of Marin Inc. at the beginning and the end of the year 2020 are as follows. Inc./Dec. MARIN INC. BALANCE SHEETS Dec. 31, 2020 Jan 1, 2020 Assets Cash $ 46,500 $14,500 Accounts receivable 94,140 89,640 Equipment 42,140 23,640 Less: Accumulated Depreciation-Equipment 20,140 11,000 Total $162,640 $116,780 Liabilities and Stockholders' Equity Accounts payable $ 23,140 $16,640 Common stock 101,500 81,640 Retained earnings 38,000 18,500 Total $162,640 $116,780 $32,000 Inc. 4,500 Inc. 18,500 Inc. 9,140 Inc. 6,500 Inc. 19,860 Inc. 19,500 Inc. Net income of $47,140 was reported, and dividends of $27,640 were paid in 2020. New equipment was purchased and none was sold. Prepare a statement of cash flows for the year 2020. (Show amounts that decrease cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).) MARIN INC. Statement of Cash Flows Adjustments to reconcile net income to

Answer 1

Solution

Marin Corporation
Statement of Cash Flows
For the Year Ended December 31, 2020
A. Cash Flows from Operating Activity
Net Income		$      47,140.00
Adjustments to reconcile net income to net cash flows from Operating Activities
Depreciation expense	$             9,140.00
Changes In Current Operating Assets Liabilities
Increase in Accounts Receivable	$           (4,500.00)
Increase in Accounts Payable	$             6,500.00
		$      11,140.00
Net cash flow from Operating activities		$      58,280.00
B. Cash flows from Investing Activities
Cash used to purchase Equipment	$        (18,500.00)
Net Cash Used in Investing activities		$    (18,500.00)
C. Cash Flows from Financing activities
Issue of common stock	$           19,860.00
Cash paid for Dividends	$        (27,640.00)
Cash flows from Financing activities		$      (7,780.00)
Net Increase (Decrease) in Cash [A+B+C]		$      32,000.00
Cash balance at prior Year-end		$      14,500.00
Cash balance at Current Year-end		$      46,500.00

.General notes for cash flow
Cash is increased when Current liability increase or Current asset Decrease.
Cash is Decreased when Current liability Decrease or Current asset Increase.
Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash
Profit on sale of asset or investment is a non cash profit and hence will be deducted from operating income.

Increase in equipment value indicate purchase of equipment