Rodriquez Corporation\'s comparative balance sheets are presented below: RODRIQU

Question

Rodriquez Corporation's comparative balance sheets are presented below: RODRIQUEZ CORPORATION Comparative Balance Sheets December 31 2017 2016 Cash Accounts receivable Investments Equipment Accumulated depreciation-equipment 17,700 16,600 24,900 20,250 59,750 22,500 16,150 70,150 (10,100]) (13,7501) Total $107,750 $116,400 Accounts payable Bonds payable Common stock Retained earnings $ 14,650 10,800 50,500 31,800 $107,750 $ 11,050 30,100 44,600 30,650 $116,400 Total Additional information: 1. Net income was $18,650. Dividends declared and paid were $17,500. 2. Equipment which cost $10,400 and had accumulated depreciation of $1,800 was sold for $3,800. 3. No noncash investing and financing activities occurred during 2017.

Explanation / Answer

Rodriquez Corporation Cash flow Statements for the year ended Dec 31,2017 Cash Flow from Operating Activities Equipment Account Original Cost 10400 To Bal BD 70150 By Sales 10400 Accumlated Depreciation 1800 Net Income 18650 Net Book Value 8600 Adjustments to reconcile net income to By Bal Cd 59750 Net Cash provided by Operating Activities Total 70150 Total 70150 Sales Value 3800 Depreciation 5450 Loss on Sales -4800 Loss on Sale of Equipment 4800 Accum. Depr Account Increase in Account Payable 3600 To Asset Sold 1800 By Bal Bd 10100 Increase in Account Recievable -2400 By Depreciation 5450 11450 To Bal Cd 13750 Net Cash Flow from Operating Expense 30100 Total 15550 Total 15550 Cash Flow from Investing Activities Investment Account Sales of Equipment 3800 To Bal BD 16150 Purchase of Investments -4100 To Purchase 4100 Cash Flow from Investing Activities -300 By Bal Cd 20250 Total 20250 Total 20250 Cash Flow from Financing Activities Issue of Common Stock 5900 Repayment of Bonds -19300 Dividend Paid -17500 Cash Flow from Financing Activities -30900 Net Increase(Decrease) in Cash -1100 Opening Cash Balance 17700 Closing Cash Balance 16600 Calculation of Free Cash Flow(FCF): Opreating Cash Flow=Net Income-Change in WC+Depreciation Free Cash Flow=Operating Cash Flow-Capital Expenditure Net Income 18650 Changes in Working Capital: 1200 Amortization/Depreciation 5450 Operating Cash Flow 25300 Operating Cash Flow 25300 Less: Capital Expenditure 0 Free Cash Flow 25300

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