Comparative financial statement data for Carmono Company follow: This Year Last

Question

Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash Accounts receivable Inventory S 5.50 S 10.00 35.00 68.80 42.00 82.50 Total current assets 130.00 113.80 Property, plant, and equipment 219.00 186.00 31.80 Less accumulated depreciation 42.40 Net property, plant, and equipment 176.60 54.20 Total assets S 306.60 $268.00 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings S 49.50 S 42.00 79.00 155.10 147.00 102.00 Total liabilities and stockholders' equity S 306.60 $268.00 For this year, the company reported net income as follows Sales Cost of goods sold 650.00 390.00 Gross margin Selling and administrative expenses 260.00 240.00 Net income S 20.00

Explanation / Answer

STATEMENT OF CASH FLOW Amount in $ Amount in $ Net income $                20.00 Cash flows from operating activities Adjustments for: Depreciation of the year $                10.60 $                10.60 Changes in Current Assets (Increase) / Decrease in Account receivables $                -7.00 Inventory Decrease / (Increase) $              -13.70 Accounts payable Increase / ( Decrese) $                  7.50 $              -13.20 Net cash from operating activities $                17.40 Cash flows from investing activities Purchase of property plant and equipment $              -33.00 Net cash used in investing activities $              -33.00 Cash flows from Financing activities Issue of Common Stock $                23.00 Dividend Paid $              -11.90 Net cash used in financing activities $                11.10 Net increase in cash and cash equivalents $                -4.50 Add :Cash and cash equivalents at beginning of period $                10.00 Cash and cash equivalents at end of period $                  5.50 Opening Balance in retained Earnings $             147.00 Add: Profit of the year $                20.00 Total $             167.00 Less: Closing retained earning of the year $             155.10 Dividend pad = $                11.90 Answer = 2 Free Cash Flow = Net cash Flow from the operations - Capital Expenditures Free Cash Flow = Net cash Flow from the operations = $                17.40 Minus "-" Capital Expenditures $                33.00 Free Cash Flow = $              -15.60 Answer = Free Cash Flow = - $ 15.60

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