Presented below are the financial statements of Nosker Company. NOSKER COMPANY C
ID: 2466497 • Letter: P
Question
Presented below are the financial statements of Nosker Company.
NOSKER COMPANY
Comparative Balance Sheets
December 31
Assets
2014
2013
$34,260
$19,010
32,390
18,970
26,600
20,310
59,840
77,870
(29,070
)
(23,770
)
$124,020
$112,390
Liabilities and Stockholders’ Equity
$28,370
$ 16,360
7,250
8,150
27,360
33,470
18,250
14,670
42,790
39,740
$124,020
$112,390
NOSKER COMPANY
Income Statement
For the Year Ended December 31, 2014
$241,150
175,870
65,280
24,060
41,220
2,860
38,360
8,240
$30,120
Additional data:
Further analysis reveals the following.
All operating expenses except for depreciation were paid in cash.
Nosker Company
Statement of Cash Flows
For the Year Ended December 31, 2014
Less cash payments:
Compute free cash flow.
NOSKER COMPANY
Comparative Balance Sheets
December 31
Assets
2014
2013
Cash$34,260
$19,010
Accounts receivable32,390
18,970
Inventory26,600
20,310
Equipment59,840
77,870
Accumulated depreciation—equipment(29,070
)
(23,770
)
Total$124,020
$112,390
Liabilities and Stockholders’ Equity
Accounts payable$28,370
$ 16,360
Income taxes payable7,250
8,150
Bonds payable27,360
33,470
Common stock18,250
14,670
Retained earnings42,790
39,740
Total$124,020
$112,390
Explanation / Answer
Nosker Company
Cash Flow Statement for the year ended December 31 2014 : Indirect Method
Free cash flow = Cash flows from operating activities - Cash flow needed for Capital Expenditures
As there is no capital expenditure for the company in 2014, free cash flow is $ 39,980
$ $ Cash flows from operating activities Income before income taxes 38,360 Adjustments for non cash / non operating items Depreciation expense 15,600 Interest expense 2,860 18,460 Operating profit before working capital changes 56,820 Increase in accounts receivable (13,420) Increase in inventory ( 6,290) Increase in accounts payable 12,010 (7,700) Cash operating profit before income taxes 49,120 Income taxes paid 9,140 Net cash flows from operating activities 39,980 Cash flows from investing activities Sale of equipment 7,730 Net cash flows from investing activities 7,730 Cash flows from financing activities Issuance of common stock 3,580 Redemption of bonds (6,110) Payment of dividends (27,070) Interest paid (2,860) Net cash used in financing activities 32,460 Increase in cash 15,250 Cash, December 31 2013 19,010 Cash, December 31 2014 34,260Related Questions
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