Question 5:

Current Attempt in Progress

The current sections of Marin Inc.s balance sheets at December 31, 2021 and 2022, are presented here. Marin Inc.s net income for 2022 was $317,500. Depreciation expense was $52,500.

		2022		2021
Current assets
Cash		$77,500		$ 111,250
Accounts receivable		106,250		86,250
Inventory		97,500		77,500
Prepaid expenses		21,250		23,750
Total current assets		$302,500		$298,750
Current liabilities
Accrued expenses payable		$ 7,500		$ 20,000
Accounts payable		110,000		90,000
Total current liabilities		$117,500		$ 110,000

Prepare the net cash provided by operating activities section of the companys statement of cash flows for the year ended December 31, 2022, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Marin Inc

Partial statement of cash flows

For the year ended December 31, 2022

Cash flows from operating activities
Net income		$?
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	$?
?	$?
?	$?
?	$?
?	$?
?	$?
		$?
?		$?

Question 6:

Presented below are the financial statements of Swifty Corporation.

Swifty Corporation Comparative Balance Sheets December 31
Assets		2022			2021
Cash		$ 28,000			$ 16,000
Accounts receivable		16,000			11,200
Inventory		22,400			16,000
Property, plant, and equipment		48,000			62,400
Accumulated depreciation		(25,600	)		(19,200	)
Total		$88,800			$86,400
Liabilities and Stockholders Equity
Accounts payable		$ 15,200			$ 12,000
Income taxes payable		5,600			6,400
Bonds payable		13,600			26,400
Common stock		14,400			11,200
Retained earnings		40,000			30,400
Total		$88,800			$86,400

Swifty Corporation Income Statement For the Year Ended December 31, 2022
Sales revenue				$193,600
Cost of goods sold				140,000
Gross profit				53,600
Selling expenses		$14,400
Administrative expenses		4,800		19,200
Income from operations				34,400
Interest expense				2,400
Income before income taxes				32,000
Income tax expense				6,400
Net income				$ 25,600

Additional data:

1.		Depreciation expense was $14,000.
2.		Dividends declared and paid were $16,000.
3.		During the year equipment was sold for $6,800 cash. This equipment cost $14,400 originally and had accumulated depreciation of $7,600 at the time of sale.

Part 1: Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Part 2: Compute free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)