70.2K

Verified Solution

Link Copied!

NOSKER COMPANY Comparative Balance Sheet December 31 2017 2016 Assets Cash $38,000 $20,000 Accounts Receivable 30,000 14,000 Inventory 27,000 20,000 78,000 Equipment Accumulated depreciation-equipment 60,000 (29,000) $126,000 (24,000) $108,000 Total Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable $24,000 $15,000 7,000 8,000 27,000 33,000 Common stock 18,000 14,000 38,000 $108,000 Retained earnings 50,000 Total $126,000 NOSKER COMPANY Income Statement For the Year ended December 31, 2017 Sales revenue $242,000 Cost of goods sold Gross profit 175,000 67,000 24,000 43,000 3,000 40,000 Operating expenses Income from operations Interest expense income before income taxes Income tax expense 8,000 $32,000 Net income Additional data: 1. Dividends declared and paid were $20,000. 2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale. 3. All depreciation expense, $14,500, is in the operating expenses. 4. All sales and purchases are on account. Instructions (a) Prepare a statement of cash flows using the indirect method. (b) Compute free cash flow. NOTE: DON'T FORGET YOUR FORMULAS!!! (a) NOSKER COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net income Value Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense Value Increase in accounts receivable Value Increase in inventory Value Increase in accounts payable Decrease in income taxes payable Value Value Net cash provided by operating activities

Answer & Explanation Solved by verified expert

See Answer