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Statement of Cash Flows (Direct Method) The Wolff Company's income statement and comparative balance sheets at...

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

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