In: Accounting
The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 34,050 $ 19,350 Accounts receivable 32,050 20,000 Inventory 26,800 20,100 Equipment 59,550 77,250 Accumulated depreciation—equipment (29,750 ) (24,000 ) Total $122,700 $112,700 Liabilities and Stockholders’ Equity Accounts payable $ 29,000 $ 16,150 Income taxes payable 7,000 8,150 Bonds payable 27,400 32,900 Common stock 17,250 14,650 Retained earnings 42,050 40,850 Total $122,700 $112,700 NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $242,350 Cost of goods sold 176,600 Gross profit 65,750 Operating expenses 24,150 Income from operations 41,600 Interest expense 3,500 Income before income taxes 38,100 Income tax expense 8,800 Net income $ 29,300 Additional data: 1. Dividends declared and paid were $28,100. 2. During the year equipment was sold for $8,350 cash. This equipment cost $17,700 originally and had accumulated depreciation of $9,350 at the time of sale. 3. All depreciation expense, $15,100, is in the operating expenses. 4. All sales and purchases are on account. 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 $ $
Compute free cash flow.
Statement of Cash Flows | ||||
For the Year Ended December 31, 2017 | ||||
Cash flows from operating activities | ||||
Net income | 29300 | |||
Adjustments to reconcile net income to | ||||
net cash provided by operating activities | ||||
Depreciation expense | 15100 | |||
Increase in accounts receivable | -12050 | |||
Increase in inventory | -6700 | |||
Increase in accounts payable | 12850 | |||
Decrease in income taxes payable | -1150 | 8050 | ||
Net cash provided by operating activities | 37350 | |||
Cash flows from investing activities | ||||
Sale of equipment | 8350 | |||
Net cash provided by investing activities | 8350 | |||
Cash flows from financing activities | ||||
Issuance of common stock | 2600 | |||
Redemption of bonds | -5500 | |||
Payment of dividends | -28100 | |||
Net cash used by financing activities | -31000 | |||
Net increase in cash | 14700 | |||
Cash at beginning of period | 19350 | |||
Cash at end of period | 34050 | |||
b | ||||
Net cash provided by operating activities | 37350 | |||
Less: Capital expenditures | 0 | |||
Cash dividends | 28100 | 28100 | ||
Free Cash Flow | 9250 |