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Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Please solve this. Make sure you don't use Chathpt please.

Transcribed Image Text: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).)

Transcribed Image Text: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
Expert Solution
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