E17-7 Scully Corporation\'s comparative balance sheets are presented below. SCUL

Question

E17-7
Scully Corporation's comparative balance sheets are presented below.


SCULLY CORPORATION
Comparative Balance Sheets

December 31


2012


2011
Cash $14,300 $10,700
Accounts receivable 21,200 23,400
Land 20,000 26,000
Building 70,000 70,000
Accumulated depreciation

(15,000)


(10,000)
Total

$110,500


$120,100

Accounts payable $12,370 $31,100
Common stock 75,000 69,000
Retained earnings

23,130


20,000
Total

$110,500


$120,100

Additional information:

Net income was $22,630. Dividends declared and paid were $19,500.
All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $4,900.



Prepare a statement of cash flows for 2012 using the indirect method. (List multiple entries with a positive cash flow first and then the negative cash flow. List amounts from largest to smallest e.g. 10, 5, 3, 2. If amount decreases cash flow, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

SCULLY CORPORATION
Statement of Cash Flows

For the Year Ended December 31, 2012
Cash flows from operating activities
$
Adjustments to reconcile net income
to net cash provided by operating activities
$






Net cash by operating activities

Cash flows from investing activities


Cash flows from financing activities




Net cash by financing activities


Net in cash
Cash at beginning of period

Cash at end of period

$

Explanation / Answer

Scully Corporation Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2010 Particulars Amount Amount Cash Flows from Operating Activities: Net Income $     22,630 Adjustments to Net Income: Loss from Sale of Land $       1,100 Depreciation $       5,000 Decrease in Accounts Receivable $       2,200 Decrease in Accounts Payable $ (18,730) $ (10,430) Net Cash Provided by Operating Activities $     12,200 Cash Flows from Investing Activities: Proceeds from Sale of Land $       4,900 Cash Flows from Financing Activities: Issuance of Common Stock $       6,000 Cash Dividend Paid $ (19,500) Net Cash Used by Financing Activities $ (13,500) Net Change in Cash $       3,600 Cash, beginning $     10,700 Cash, ending $     14,300 Note: Decrease in Land $       6,000 Selling Price $     (4,900) Loss from Sale $       1,100 Compute free cash flow. (If amount decreases cash flow, use either a negative sign preceding the number eg -45 or parentheses eg (45).) Solution: Computation of the Free Cash Flow of the year Free Cash Flows = Net Cash Provided by Operating Activities - Cash Dividend Free Cash Flows = $12,200 - $19,500 Free Cash Flows = $ (7,300) Hence the Free Cash flow is $ (7,300)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.