Problem: (Preparation of a Statement of Cash Flows)
Presented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31.
|
|
2007
|
2006
|
|
Cash
|
$177,000
|
$ 78,000
|
|
Accounts receivable
|
180,000
|
185,000
|
|
Investments
|
52,000
|
74,000
|
|
Equipment
|
298,000
|
240,000
|
|
Less: Accumulated depreciation
|
(106,000)
|
(89,000)
|
|
Current liabilities
|
134,000
|
151,000
|
|
Capital stock
|
160,000
|
160,000
|
|
Retained earnings
|
307,000
|
177,000
|
Additional information:
Investments were sold at a loss (not extraordinary) of $10,000; no equipment was sold; cash dividends paid were $30,000; and net income was $160,000.
Instructions:
1. Prepare a statement of cash flows for 2007 for Zubin Mehta Corporation.
2. Determine Zubin Mehta Corporation's free cash flow.