Table 3-3 Marlett Company Financial Information December 2009 Decembe

Table 3-3

Marlett Company
Financial Information
December 2009 December 2010
Net Income $2,000 $4,000
Accounts receivable 750 1,250
Accumulated depreciation 1,000 1,400
Common stock 4,500 5500
Paid-in capital 7,500 8500
Retained earnings 1,500 3,500
Accounts payable 750 950
Based on the information in Table 3-3, prepare a statement of cash flows for 2010. Assume that there were no
changes in any other asset or liability accounts, and that the ending cash balance for 2009 was $100.

ANSWER

Marlett Company
Statement of Cash Flows
For the Year Ended Dec. 31, 2008
Operating Activities
Net Income $4,000
Depreciation Expense 400
Increase in Accounts Receivable (500 )
Increase in Accounts Payable 200
Cash Flow from Operations $4,100
Investing Activities
Cash Flow from Investing Activities $0
Financing Activities
Increase in Common Stock $1,000
Increase in Paid-in-Capital 1,000
Dividends Paid (2,000 )
Cash Flow from Financing Activities $0
Change in Cash $4,100
Beginning Cash Balance 100
Ending Cash Balance $4,200