In: Accounting
The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $34,600 $19,900 Accounts receivable 32,450 19,050 Inventory 26,400 20,150 Equipment 59,000 77,500 Accumulated depreciation—equipment (29,450 ) (23,250 ) Total $123,000 $113,350 Liabilities and Stockholders’ Equity Accounts payable $28,500 $ 16,050 Income taxes payable 7,250 8,300 Bonds payable 27,200 33,150 Common stock 17,400 14,050 Retained earnings 42,650 41,800 Total $123,000 $113,350 NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $241,750 Cost of goods sold 176,950 Gross profit 64,800 Operating expenses 24,200 Income from operations 40,600 Interest expense 2,250 Income before income taxes 38,350 Income tax expense 8,600 Net income $29,750 Additional data: 1. Dividends declared and paid were $28,900. 2. During the year equipment was sold for $7,950 cash. This equipment cost $18,500 originally and had accumulated depreciation of $10,550 at the time of sale. 3. All depreciation expense, $16,750, is in the operating expenses. 4. All sales and purchases are on account. Collapse question part (a) 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).) NOSKER COMPANY Statement of Cash Flows $ Adjustments to reconcile net income to $ $ LINK TO TEXT LINK TO TEXT Attempts: 0 of 5 used SAVE FOR LATER SUBMIT ANSWER Expand question part (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
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NOSKER COMPANY |
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Statement of Cash Flows |
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For the Year Ended December 31, 2017 |
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Cash flows from operating activities |
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Net income |
$29,750 |
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Adjustments to reconcile net income to net cash provided by operating activities |
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Depreciation expense |
$16,750 |
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Increase in accounts payable |
12,450 |
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Decrease in income taxes payable |
(1,050) |
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Increase in inventory |
(6,250) |
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Increase in accounts receivable |
(13,400) |
8,500 |
Net cash provided by operating activities |
38,250 |
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Cash flows from investing activities |
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Sale of equipment |
7,950 |
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Cash flows from financing activities |
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Issuance of common stock |
3,350 |
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Redemption of bonds |
(5,950) |
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Payment of dividends |
(28,900) |
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Net cash used by financing activities |
(31,500) |
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Net increase in cash |
14,700 |
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Cash at beginning of period |
19,900 |
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Cash at end of period |
$34,600 |
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Compute free cash flow
=$38,250 - $0 - $28900
=$9,350