P17-7A following are the financial statements of Nosker Company P17-7A NOSKER CO

Question

P17-7A

following are the financial statements of Nosker Company P17-7A NOSKER COMPANY Comparative Balance Sheets December 31 Prepare a statement of cash flows-indirecr method and compule free cash flow Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment 2017 2016 S 38,000 $ 20,000 14,000 20,000 78,000 (24,000) $126,000 $108,00 30,000 27,000 60,000 XLS (29,000) Total Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings S 24,000 7,000 27,000 18,000 50,000 $126,000 S 15,000 8,000 33,000 14,000 38,000 $108,000 Total 277

Explanation / Answer

1) Cash flow statement : Amount $ Cash flow from operating activities: Net Income 32000 Add: Dep 14500 less: AR increa -16000 less: invent increa -7000 add: AP increas 9000 less: IT payab decreas -1000 Net cash inflow from operating activities 31500 Cash flow from investing activities: add : sale of equip 8500 Cash inflow from investing activities 8500 Cash flow from financing activities: less: Bonds paid -6000 add: CS issued 4000 less: dividend paid -20000 Cash outflow from financing activities -22000 Cash inflow from all activities 18000 Add: open cash 20000 Closing cash 38000 b) Free cash flow = Operating cash flow - Capital expenditures = 31500 - 0 = $31500

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