(Preparation of a Statement of Cash Flows, Analysis)
The comparative balance sheets of Menachem Corporation at the beginning and end of the year 2012 appear below.
 
MENACHEM CORPORATION
Balance Sheets
Assets
Dec. 31, 2012
Jan. 1, 2012
Inc./Dec.
Cash
$23,380 
$14,340 
$9,040 Inc.
Accounts receivable
107,380 
89,340 
18,040 Inc.
Equipment
38,380 
23,340 
15,040 Inc.
Less: Accumulated depreciation
(17,000)
(11,000)
6,000 Inc.
Total
$152,140 
$116,020 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Accounts payable
$21,380
$16,340
5,040 Inc.
Common stock
101,380
81,340
20,040 Inc.
Retained earnings
29,380
18,340
11,040 Inc.
Total
$152,140
$116,020
 
Net income of $35,380 was reported, and dividends of $24,340 were paid in 2012. New equipment was purchased and none was sold.
(a)
Prepare a statement of cash flows for the year 2012. (List multiple entries from the largest positive to the smallest positive amount followed by the most negative to the least negative amount, e.g. 15, 14, 10, -17, -5, -1. For negative numbers use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)
 
MENACHEM CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2012
Cash flows from operating activities
 
 

 
$
Adjustment to reconcile net income to net cash
 
 
provided by operating activities:
 
 

$
 

 
Increase in accounts receivable
Net cash provided by operating activities
 
 
 
 
Cash flows from investing activities
 
 

 
 
 
 
Cash flows from financing activities
 
 

 
Net cash used by financing activities
 
Net increase in cash
 
Cash at beginning of year
 
Cash at end of year
 
$
(b)
Compute the current ratio (current assets ÷ current liabilities) as of January 1, 2012, and December 31, 2012, and compute free cash flow for the year 2012. (Round ratios to 2 decimal places, e.g. 2.25. For negative numbers use…