Oriole Company’s comparative balance sheets are presented below: Oriole Company Comparative Balance Sheets December 31 2020 2019 Cash $ 16,500 $ 17,600 Accounts receivable 25,000 22,200 Investments 19,950 15,850 Equipment 60,150 70,050 Accumulated depreciation—equipment (14,250 ) (10,400 ) Total $107,350 $115,300 Accounts payable $ 14,850 $ 11,050 Bonds payable 10,100 30,100 Common stock 50,100 44,700 Retained earnings 32,300 29,450 Total $107,350 $115,300 Additional information: 1. Net income was $18,250. Dividends declared and paid were $15,400. 2. Equipment which cost $9,900 and had accumulated depreciation of $2,000 was sold for $3,400. 3. No noncash investing and financing activities occurred during 2020. Prepare a statement of cash flows for 2020 using the indirect method.

Explanation:

Oriole Company

Statement of cash flow

For the year ending 2020

Cash flows from Operating Activities

Net Income                                                                                       $18,250

Adjustments to reconcile net income to

net cash provided by operating activities:

Add: Loss on sale of equipment

($9,900 - $2,000 - $3,400)                                                               $4,500

Depreciation on Fixed Assets ($14,250 - $10,400 - $2,000)          $1,850                

(Increase) Decrease in current assets:

Accounts receivable ($25,000 - $22,200)                                     ($2,800)

Increase (Decrease) in current liabilities:

Accounts Payable ($14,850 - $11,050)                                             $3,800

Net Cash provided by operating activities                                   $25,600

Cash flows from Investing Activities

Disposal of Equipment                                                                    $3,400

Net Cash used in Investing Activities                                          $3,400

Cash flows from Financing Activities

Payments on Bonds Payable ($10,100 - $30,100)                       ($20,000)

Common Stock ($50,100 - $44,700)                                               $5,400

Dividends paid                                                                                ($15,400)

Net Cash used in financing activities                                        ($30,000)                                    

Beginning Cash Balance                                                                 $17,600

Ending Cash Balance                                                                      $16,500

The investments most vulnerable to political risk are those that depend directly on the balance of payments of a country, such as, for example, Bonds of the Republic, debt guaranteed with the nation.

After direct financing, there is the indirect financing of state companies such as electricity or oil companies.

The oil and natural gas pipelines are immobile and long-lived, they have high vulnerability because if there is a situation with the Government, there is immediately a scenario of uncertainty, so on the scale of 1 to 10 it would qualify as 8.