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resented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31. 2015 $177.000 180.000 52.000 298,000 201 $ 78.000 185.000 74,000 Cash Accounts receivable Investments Equipment Accumulated depreciation-equipment Current liabilities Common stock Retained earnings Additional information: Investments were sold at a loss (not extraordinary) of $10,000: no equipment was soid: cash dividends paid were $30.000 and net income was $160,000. Instructions (a) Prepare a statement of cash flows for 2014for Zubin Mehta Corporation. (b) Determine Zubin Mehta Corporation's free cash flow 240,000 (89.000) 151,000 160.000 177,000 (106.000) 134.000 160,000 307.000 03) Chinnewas Inc bas

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Answer:

a)

                Zubin Mehta Corporation

                 Statement of Cash Flows

         For the Year Ended December 31. 2015

Cash flows from operating activities:

Net income                                                                 $160,000

Adjustments to net income:

  • Depreciation expense $17,000
  • Decrease in accounts receivable $5,000
  • Loss on sale of investments $10,000
  • Decrease in current liabilities ($17,000)           $15,000

Net cash flow from operating activities                   $175,000

Cash flow from investing activities:

Sale of investment                                                      $12,000

Purchase of equipment                                           ($58,000)

Net cash flow from investing activities                  ($46,000)

Cash flow from financing activities:

Paid dividends                                                        ($30,000)

Net cash flow from financing activities                 ($30,000)

Net increase in cash                                               $99,000

Cash balance December 31, 2014                        $78,000

Cash balance December 31, 2015                        $177,000

b) free cash flow for 2015 = $99,000

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