Question

The following is a condensed version of the comparative balance sheets for Riverbed Corporation for the last two years at December 31. 2020 2019 Cash $ 362,850 $ 159,900 Accounts receivable 369,000 379,250 Investments 106,600 151,700 Equipment 610,900 492,000 Accumulated Depreciation-Equipment (217,300 ) (182,450 ) Current liabilities 274,700 309,550 Common stock 328,000 328,000 Retained earnings 629,350 362,850 Additional information: Investments were sold at a loss of $20,500; no equipment was sold; cash dividends paid were $61,500; and net income was $328,000. Prepare a statement of cash flows for 2020 for Riverbed Corporation

Answer 1

The preparation of the cash flow statement is presented below:

Step-by-step explanation:

Riverbed Corporation

Statement of Cash Flows

For the year ended December 31,2020

Cash flows from Operating Activities

Net Income: $328,000

Adjustment to net income is:

Add: Depreciation Expense $34,850 ($217,300 - $182,450)

Add: Loss on sale of Investments $20,500

Add: Decrease in Accounts receivable $10,250 ($369,000 - $379,250)

Less: Decrease in Current Liabilities ($34,850) ($274,700 - $309,550)

Net cash flow from operating activities $358,750 A

Cash flows from Investing activities

Purchase of equipment ($118,900) ($610,900 - $492,000)

Add Sale of Investment $24,600 ($151,700 - $106,600 - $20,500)

Net cash used by investment activities ($94,300) B

Cash flows from Financing activities

payment of dividends ($61,500)

Net cash used by financing activities ($61,500) C

Net Increase in cash $202,950 (A + B + C)