question archive Marlette Company Financial Information December 2019 December 2020 Net Income $2,000 $5,000 1750 Accounts receivable 1,000 1,000 Accumulated depreciation 1,500 Common stock 4,500 5,000 7,500 Additional paid-in capital 8,000 Retained earnings 1,500 2,500 Accounts payable 750 800 Please fill your answers in the box below: a) Based on the information found in the above table prepare The cash flow statement for the year 2020
Marlette Company Financial Information December 2019 December 2020 Net Income $2,000 $5,000 1750 Accounts receivable 1,000 1,000 Accumulated depreciation 1,500 Common stock 4,500 5,000 7,500 Additional paid-in capital 8,000 Retained earnings 1,500 2,500 Accounts payable 750 800 Please fill your answers in the box below: a) Based on the information found in the above table prepare The cash flow statement for the year 2020
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Marlette Company Financial Information December 2019 December 2020 Net Income $2,000 $5,000 1750 Accounts receivable 1,000 1,000 Accumulated depreciation 1,500 Common stock 4,500 5,000 7,500 Additional paid-in capital 8,000 Retained earnings 1,500 2,500 Accounts payable 750 800 Please fill your answers in the box below: a) Based on the information found in the above table prepare The cash flow statement for the year 2020. b) Calculate the net cash flow
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Step1 : calculation of cash flow statement
Concept=Increase in asset Eg accounts receivable reduces cash as it is used to buy or create the asset annd vice versa.Decrease in liability eg accound payable increase The cash source and vice versa
Step2
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Marlett Company |
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Statement of cash flow For the year ended 2020 |
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In $ |
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Operating Activities |
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Net Income |
5000 |
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Depreciation Expense |
500 |
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Increase in Accounts Receivable |
(250) |
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Increase in Accounts Payable |
50 |
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Cash Flow from Operations |
5300 |
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Investing Activities |
$0 |
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Financing Activities |
|
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Increase in Common Stock |
500 |
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Increase in Paid-in-Capital |
500 |
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Dividends Paid (working Note) |
(4000) |
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Cash Flow from Financing Activities |
(3000) |
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Net cash Flow (5300-3000) |
2300 |
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Add Beginning cash flow |
- |
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Closing cash Flow |
- |
Step3 Working note for dividend
Net income= 5000
increase in retained earning =1000
Hence Dividend paid = (5000-1000)=$4000 therefore out of 5000 , $ 4000 is distributed as dividend $1000 is retained
