In: Accounting
Statement of Cash Flows (Direct Method)
The Wolff Company's income statement and comparative balance sheets
at December 31 of 2013 and 2012 are shown below:
WOLFF COMPANY Income Statement For the Year Ended December 31, 2013 |
||
---|---|---|
Sales Revenue | $698,500 | |
Cost of Goods Sold | $473,000 | |
Wages Expense | 94,600 | |
Insurance Expense | 8,800 | |
Depreciation Expense | 18,700 | |
Interest Expense | 9,900 | |
Income Tax Expense | 31,900 | 636,900 |
Net Income | $61,600 |
WOLFF COMPANY Balance Sheets |
||
---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | |
Assets | ||
Cash | $12,100 | $5,500 |
Accounts Receivable | 45,100 | 35,200 |
Inventory | 99,000 | 66,000 |
Prepaid Insurance | 5,500 | 7,700 |
Plant Assets | 275,000 | 214,500 |
Accumulated Depreciation | (74,800) | (56,100) |
Total Assets | $361,900 | $272,800 |
Liabilities and Stockholders' Equity | ||
Accounts Payable | $7,700 | $11,000 |
Wages Payable | 9,900 | 6,600 |
Income Tax Payable | 7,700 | 8,800 |
Bonds Payable | 143,000 | 82,500 |
Common Stock | 99,000 | 99,000 |
Retained Earnings | 94,600 | 64,900 |
Total Liabilities and Stockholders' Equity | $361,900 | $272,800 |
Cash dividends of $31,900 were declared and paid during 2013. Plant
assets were purchased for cash and bonds payable were issued for
cash. Bond interest is paid semi-annually on June 30 and December
31. Accounts payable relate to merchandise purchases.
Required
a. Calculate the change in cash that occurred during 2013.
b. Prepare a statement of cash flows using the indirect
method.
c. Compute free cash flow.
d. Compute the operating-cash-flow-to-current-liabilities
ratio.
e. Compute the operating-cash-flow-to-capital-expenditures
ratio.
a. Change in Cash during 2013 $Answer
Answer
b. Use a negative sign with cash outflow answers.
WOLFF COMPANY Statement of Cash Flows For Year Ended December 31, 2013 |
||
---|---|---|
Cash Flow from Operating Activities | ||
Cash Received from Customers | Answer | |
Cash paid for Merchandise Purchased | Answer | |
Cash Paid to Employees | Answer | |
Cash Paid as Insurance | Answer | |
Cash Paid for Interest | Answer | |
Cash Paid as Income Taxes | Answer | Answer |
Cash Provided by Operating Activities | Answer | |
Cash Flow from Investing Activities | ||
Purchase of Plant Assets | Answer | |
Cash Flow from Financing Activities | ||
Issuance of Bonds Payable | Answer | |
Payment of Dividends | Answer | |
Cash Provided by Financing Activities | Answer | |
Net Change in Cash | Answer | |
Cash at Beginning of Year | Answer | |
Cash at End of Year | Answer |
c. Free cash flow $Answer
d. Operating-cash-flow-to-current-liabilities ratio.
Round answer to two decimal places.
Answer
e. Operating-cash-flow-to-capital-expenditures ratio.
Round answer to two decimal places.
Answer