Mulder Corporation\'s comparative balance sheets are presented below. MULDER COR

Question

Mulder Corporation's comparative balance sheets are presented below. MULDER CORPORATION Comparative Balance Sheets December 31 2012 2011 Cash $ 15,200 $ 17,700 Accounts receivable 25,200 22,300 Investments 20,000 16,000 Equipment 60,000 70,000 Accumulated depreciation (14,000) (10,000) Total $106,400 $116,000 Accounts payable $ 14,600 $ 11,100 Bonds payable 10,000 30,000 Common stock 50,000 45,000 Retained earnings 31,800 29,900 Total $106,400 $116,000 Additional information: 1.Net income was $18,300. Dividends declared and paid were $16,400. 2.Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $3,300. 3.All other changes in non current account balances had a direct effect on cash flows, except the change in accumulated depreciation. Prepare a statement of cash flows for 2012 using the indirect method

Explanation / Answer

Hi,

Please find the answer as follows:

Cash flows from operating activities
Net Income 18300 Add Depreciation 5200 Increase in accounts payable 3500 Loss on sale of equipment 5500 Less Increase in accounts receivable -2900 Net cash provided by operating activities 29600

Cash flows from investing activities
Purchase of Investments -4000 Proceeds from sale of equipment 3300 Net cash used by investing activities -700

Cash flows from financing activities
Proceeds from issue of share capital 5000 Redemption of bonds payable -20000 Dividends paid -16400 Net cash provided by financing activities -31400

Decrease in Cash -2500 Opening Cash Balance 17700 Ending Cash Balance 15200

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