Prepare the opeiiting activities section ol the steent of cash iows using the dl

Question

Prepare the opeiiting activities section ol the steent of cash iows using the dlrett meho XLS P12-7A Presented below are the financial statements of Warner Company WARNER COMPANY Comparative Balance Sheets December 31 Net cash provided $305,000 Prepare a statement of cash flows-indirect method, and compute free cash flow Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Total 2017 2016 $ 20,000 14,000 20,000 78,000 (24,000) $108,000 S 35,000 20,000 28,000 XLS 60,000 (32,000) $111,000 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total S 19,000 7,000 17,000 18,000 50,000 $111,000 15,000 8,000 33,000 14,000 38,000 $108,000 WARNER COMPANY Income Statement For the Year Ended December 31, 2017 $242,000 175,000 67,000 Sales revenue Cost of goods sold Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Net income $18,000 6,000 24,000 43,000 3,000 40,000 8,000 S 32,000

Explanation / Answer

Indirect Method of cash flow Statement of cash flow Cash from operating activities Net income for the year 32,000 Adjustments to reconcile net income depreciation expense 17,500 increase in accounts receivable -6,000 increase in inventory -8,000 increase in accounts payable 4,000 Decrease In income taxes payable -1,000 Cash provided by operating activities 38,500 Cash from investing activities Cash from sale of Equipment 8,500 Cash provided by investing activities 8,500 Cash from financing activities Redemption of bonds payable -16000 Cash from common stock issue 4,000 Cash dividend paid -20,000 Cash used by financing activities -32,000 Net increase in cash 15,000 Cash at beginning of the year 20,000 cash at year end 35,000 Free cash flow = cash from operating activities - capital expenditure- cash dividend 38,500-0-20,000 18500

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---