Question

Riverbed Corporation's balance sheet at the end of 2019 included the following items. Current assets (Cash $82,000) $236,890 Current liabilities Land 31,420 Bonds payable Buildings 121,890 Common stock Equipment 91,420 Retained earnings Accum. depr.-buildings (31,890) Total Accum. depr.-equipment (11,000) Patents 41,890 Total $480,620 $151,890 101,890 181,420 45,420 $480,620 The following information is available for 2020. 1. Net income was $54,200. 2. Equipment (cost $21,890 and accumulated depreciation $9,890) was sold for $11,890. 3. Depreciation expense was $5,890 on the building and $10,890 on equipment. 4. Patent amortization was $2,500. 5. Current assets other than cash increased by $29,000. Current liabilities increased by $14,890. 6. An addition to the building was completed at a cost of $28,890. 7. A long-term investment in stock was purchased for $16,000. 8. Bonds payable of $51,420 were issued. 9. Cash dividends of $30,000 were declared and paid. 10. Treasury stock was purchased at a cost of $11,000. Prepare a statement of cash flows for 2020. (Show amounts that decrease cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).) RIVERBED CORPORATION Statement of Cash Flows Adjustments to reconcile net income to

Answer 1

Riverbed Corporation Cashflow Statement-Indirect method Calculation =(21,890-9,890)-11,890 Cash flows from Operating Activities Net income 54,200 Adjustments to reconcile net income to net cash from operating activities Loss on sale of equipment 110 Depreciation expense -Buildings 5,890 Depreciation expense - Equipment 10,890 Amortization expense 2,500 Increase in Current assets other than cash (29,000) Increase in Current liabilities 14,890 5,280 Net Cash Provided/(Used) by Operating Activities 59,480 Cash flows from Investing Activities Proceeds from sale of equipment Payments for addition to the building Payments for long-term investment (Equity) in stock Net Cash Provided/(Used) by Investing Activities 11,890 (28,890) (16,000) (33,000) 51,420 (30,000) (11,000) Cash flows from Financing Activities Proceeds from issue of bonds Dividends paid Payments for purchase of Treasury stock Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period Cash at End of Period 10,420 36,900 82,000 118,900

Riverbed Corporation Balance Sheet As of December 31, 2020 Assets Current assets Calculation =118,900+183,890 302,790 Investments Long-term investment in stock 16,000 31,420 150,780 (37,780) Property, Plant and Equipment Land Buildings Accum. depr.-buildings Buildings, Net Equipment Accum. depr.-equipment Equipment, Net Total Property, Plant and Equipment 113,000 69,530 (12,000) 57,530 201,950 Intangible Assets Patents Total Assets 39,390 560,130 Liabilities & Stockholders Equity Current liabilities 166,780 Long-term liabilities Bonds payable Total liabilities 153,310 320,090 Stockholders Equity Common stock Retained earnings Treasury stock Total Stockholders Equity Total Liabilities & Stockholders Equity 181,420 69,620 (11,000) 240,040 560,130

2016 82,000 154,890 Calculation Changes From cashflow Changes 36,900 29,000 16,000 Riverbed Corporation Balance Sheet As of Dec 31 Assets Cash Current assets other than cash Long-term investment in stock Land Buildings Equipment Accum. depr.-buildings Accum. depr.-equipment Patents Total Assets 31,420 121,890 91,420 (31,890) (11,000) 41,890 480,620 28,890 (21,890) (5,890) (1,000) (2,500) 79,510 2017 118,900 183,890 16,000 31,420 150,780 69,530 (37,780) (12,000) 39,390 560,130 =9,890-10,890 Liabilities & Stockholders Equity Current liabilities Bonds payable Common stock Retained earnings Treasury stock Total Liabilities & Stockholders Equity 151,890 101,890 181,420 45,420 14,890 166,780 51,420 153,310 181,420 24,200 69,620 =54,200-30,000 (11,000) (11,000) (Net Inc less Div) 79,510 560,130 480,620