Marin Inc., a greeting card company, had the following statements prepared as of December 31, 2025. Marin Inc. Comparative Balance Sheet As of December 31, 2025 and 2024 12/31/25 12/31/24 Cash $6,000 $7,000 Accounts receivable 61,700 51,200 Short-term debt investments (available-for-sale) 34,900 18,000 Inventory 39,700 60,400 Prepaid rent 4,900 4,000 Equipment 155,500 128,900 Accumulated depreciation-equipment (35,100) (25,000) Copyrights 46,500 50,400 Total assets $314,100 $294,900 Marin Inc. Income Statement For the Year Ending December 31, 2025 Sales revenue Cost of goods sold Gross profit $339,375 175,000 164,375 Operating expenses 119,400 Operating income 44,975 Interest expense $11,500 Gain on sale of equipment 1,900 9,600 Income before tax 35,375 Income tax expense 7,075 Net income $28,300 Additional information: 1. Dividends in the amount of $6,100 were declared and paid during 2025. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2025. 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).) Prepare a statement of cash flows using the indirect method. Show amounts that decrease cash flow with either a-sign-15,000 (15,000) Cash Flows from Operating Act MARIN INC. STATEMENT OF CASH FLOWS For the Year Ended December 31, 2005 Adjustments to reconcile net income to Net Cash Provided by Depreciation Exper Amortization of Copert Sk Increase in Accounts Receivable Adjustments to reconcile net income to Net Cash Provided by Operating Activities 23,940 8,900 -1900 Depreciation Expense $ 23,960 Amortization of Copyright 3,500 Gain on Sale of Equipment -1900 Increase in Accounts Receivable -10,500 Increase in Inventory Increase in Prepaid Rent Increase in Accounts Payable -16,900 -500 5,800 Decrease in Income Taxes Payable -2000 Increase in Salaries and Wages Payable 4000 Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Purchase of Equipment Net Income Cash Flows from Financing Activities 7,840 38.560 Net Increase in Cash Principal Payment on Long-Term Loan -8,900 Dividend Payments -6.100 Sale of Equipment Purchase of Equipment Net Income Cash Flows from Financing Activities Net Increase in Cash Principal Payment on Long-Term Loan -8,900 Dividend Payments Net Income Cash. December 31.2025 Net Increase in Cash Net Decrease in Cash Cash, December 31, 2025 -6,100 15,000 24,250 52,560 14,000 7,840 -46,400 -38,560 -15,000 -1000 7,000 6,000 14,000

Marin Inc., a greeting card company, had the following statements prepared as of December 31, 2025. Marin Inc. Comparative Balance Sheet As of December 31, 2025 and 2024 12/31/25 12/31/24 Cash $6,000 $7,000 Accounts receivable 61,700 51,200 Short-term debt investments (available-for-sale) 34,900 18,000 Inventory 39,700 60,400 Prepaid rent 4,900 4,000 Equipment 155,500 128,900 Accumulated depreciation-equipment (35,100) (25,000) Copyrights 46,500 50,400 Total assets $314,100 $294,900 Marin Inc. Income Statement For the Year Ending December 31, 2025 Sales revenue Cost of goods sold Gross profit $339,375 175,000 164,375 Operating expenses 119,400 Operating income 44,975 Interest expense $11,500 Gain on sale of equipment 1,900 9,600 Income before tax 35,375 Income tax expense 7,075 Net income $28,300 Additional information: 1. Dividends in the amount of $6,100 were declared and paid during 2025. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2025. 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).) Prepare a statement of cash flows using the indirect method. Show amounts that decrease cash flow with either a-sign-15,000 (15,000) Cash Flows from Operating Act MARIN INC. STATEMENT OF CASH FLOWS For the Year Ended December 31, 2005 Adjustments to reconcile net income to Net Cash Provided by Depreciation Exper Amortization of Copert Sk Increase in Accounts Receivable Adjustments to reconcile net income to Net Cash Provided by Operating Activities 23,940 8,900 -1900 Depreciation Expense $ 23,960 Amortization of Copyright 3,500 Gain on Sale of Equipment -1900 Increase in Accounts Receivable -10,500 Increase in Inventory Increase in Prepaid Rent Increase in Accounts Payable -16,900 -500 5,800 Decrease in Income Taxes Payable -2000 Increase in Salaries and Wages Payable 4000 Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Purchase of Equipment Net Income Cash Flows from Financing Activities 7,840 38.560 Net Increase in Cash Principal Payment on Long-Term Loan -8,900 Dividend Payments -6.100 Sale of Equipment Purchase of Equipment Net Income Cash Flows from Financing Activities Net Increase in Cash Principal Payment on Long-Term Loan -8,900 Dividend Payments Net Income Cash. December 31.2025 Net Increase in Cash Net Decrease in Cash Cash, December 31, 2025 -6,100 15,000 24,250 52,560 14,000 7,840 -46,400 -38,560 -15,000 -1000 7,000 6,000 14,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 49E

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