Presented below are the financial statements of Kurtzel Company. KURTZEL COMPANY
ID: 2475905 • Letter: P
Question
Presented below are the financial statements of Kurtzel Company.
KURTZEL COMPANY
Comparative Balance Sheets
December 31
Assets
2014
2013
$ 90,370
$ 51,640
51,640
36,148
72,296
51,640
154,920
201,396
(82,624
)
(61,968
)
$286,602
$278,856
Liabilities and Stockholders’ Equity
$ 49,058
$ 38,730
18,074
20,656
43,894
85,206
46,476
36,148
129,100
98,116
$286,602
$278,856
KURTZEL COMPANY
Income Statement
For the Year Ended December 31, 2014
$624,844
451,850
172,994
$46,476
15,492
61,968
111,026
7,746
103,280
20,656
$ 82,624
Additional data:
Dividends declared and paid were $51,640.
1.) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
2.) Compute these cash-based measures:
a) Current cash debt coverage ________ times.
b) Cash debt coverage ________ times.
c) Free cash flow $________
KURTZEL COMPANY
Comparative Balance Sheets
December 31
Assets
2014
2013
Cash$ 90,370
$ 51,640
Accounts receivable51,640
36,148
Inventory72,296
51,640
Property, plant, and equipment154,920
201,396
Accumulated depreciation(82,624
)
(61,968
)
Total$286,602
$278,856
Liabilities and Stockholders’ Equity
Accounts payable$ 49,058
$ 38,730
Income taxes payable18,074
20,656
Bonds payable43,894
85,206
Common stock46,476
36,148
Retained earnings129,100
98,116
Total$286,602
$278,856
Explanation / Answer
Cash flow indirect method:
Amount Amount Cash Flow from Operating Acitvities Net Income 82,624 Add: Depreciation 45,185 Less: Increase in accounts receivable (15,492) Less: Increase in Inventory (20,656) Add: Increase in Account Payable 10,328 Less: Decrease in Income Tax payable (2,582) Cash flow from Operating Activities 99,407 Cash Flow from Investing Activities Sale of equipment 21,947 Cash Flow from Investing Activities 21,947 Cash Flow from Financing Activities: Rdemption of Bonds Payable (41,312) Issue of Common Stock 10,328 Cash paid for Dividend (51,640) Cash Flow from Financing Activities (82,624) Net Change in cash 38,730 Add: Opening Balance of Cash 51,640 Closing Balance of Cash 90,370Related Questions
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