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# Statement of cash flows

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I can not get the cashflow statement to match the increase in cash from the balance sheet
(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
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.

#### Solution Summary

The solution explains how to prepare a statement of cash flows and calculate the amount of free cash flow.

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## Statement of Cash Flows: Time for change! SFAS No. 95

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As contained in the Week Four electronic reserve readings article readings, this article, Broome, O. W. (2004, March/April). Statement of cash flows: Time for change! Financial Analysts Journal, 60(2), 16. , describes the current SFAS No. 95 requirements for the statement of cash flows, cites recent cases of abuse and disinformation involving the statement, and makes significant recommendations for improving the statement. Based on the comments in the article do you think the three sections of the statement of cash flows provide enough information for the reader? Of the three which provides the most information or is this an 'it depends' answer?

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