Sales Revenue $242,000 Cost of Goods Sold $175,000 Gross Profit $67,000 Operatin

Question

Sales Revenue                                 $242,000

Cost of Goods Sold                          $175,000

Gross Profit                                        $67,000

Operating expenses                       $24,000

Interest Expense                             $3,000

Interest before Income tax         $40,000

Income tax expense                       $8,000

Net Income                                        $32,000

Dividends declared and paid were $20,000

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.

All depreciation expense $14,500, is in the operating expenses.

All sales and purchases are on account.

Prepare a statement of cash flows using the indirect method.

Compute free cash flow.

Assets                                   2014                       2013

Cash                                      38,000                   20,000

Accounts receivable       30,000                   14,000

Inventory                            27,000                   20,000

Equipment                          60,000                   78,888

(Accumulated Dep.         (29,000)                (24,000)

Total                                      126,000 108,000

Liabilities

Accounts Payable            24,000                   15,000

Income Taxes Payable   7,000                     8,000

Bonds Payable                  27,000                   33,000

Common Stock                 18,000                   14,000

Retained earnings           50,000                   38,000

Total                                      126,000 108,000

I need this answered and completed in the below format.

FOR THE YEAR ENDED DECEMBER 31,2014

NOSKER COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,2014

CASH FLOWS FROM OPERATING ACTIVITIES NET INCOME ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES DEPRECIATON EXPENSE INCREASE IN ACCOUNTS RECEIVABLE INCREASE IN INVENTORY DECREASE IN ACCOUNTS PAYABLE INCREASE IN INCOME TAXES PAYABLE NET CASH PROVIDED BY OPERATING ACTIVITIES ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES SALE OF EQUIPMENT PURCHASE OF EQUIPMENT NET CASH PROVIDED BY FINANCING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES ISSUANCE OF BONDS PAYMENT OF CASH DIVIDENDS NET CASH USED BY FINANCING ACTIVITIES NET DECREASE IN CASH CASH AT BEGINNING OF PERIOD CASH AT END OF PERIOD

Explanation / Answer

Nosker Company

Statement of CAsh Flow

For the year ended 31st dec 2014

Cash Flow from Operating Activities ($) Net Income 32000 Adjustments to Reconcile Net income Add Depreciation Expense 14500 less Increase in Accounts Receivable (16000) Less Increase in Inventory (7000) Add Increase In Accounts Payable 9000 less Decrease in Income Tax Payable (1000) Net CAsh Provided by Operating Activities 31500 CAsh Flow From Investing Activities Sale Of Equipment 8500 Cash Flow From Financing Activities Issuance Of Common Stock (18000-14000) 4000 Redembtion of Bonds(27000 - 33000) (6000) Payment Of Dividend (20000) Net Cash utilised by Financing Activities (22000) Net Increase in Cash 18000 CAsh at Beginning of Period 20000 CAsh at End of the Period 38000

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