Cullumber Company\'s comparative balance sheets are presented below Cullumber Co

ID: 2586545 • Letter: C

Question

Cullumber Company's comparative balance sheets are presented below Cullumber Company Comparative Balance Sheets December 31 2019 2018 Cash Accounts receivable Land Buildings Accumulated depreciation-buildings $14,200 10,000 22,900 25,500 69,500 (14,500) (10,000) $109,400$117,900 20,700 19,500 69,500 Total Accounts payable Common stock Retained earnings 11,800 27,600 71,000 19,300 $109,400$117,900 74,000 23,600 Total Additional information: 1. Net income was $22,100. Dividends declared and paid were $17,800 2. No noncash investing and financing activities occurred during 2019 3. The land was sold for cash of $4,400

Explanation / Answer

Cullumber Company

CASH FLOW STATEMENT FOR THE YEAR ENDED DEC 31,2019

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit /Operating Profit Before Tax &Working Capital Changes

22,100.00

Adjustment For non cash items and working capital changes:

Loss on sale of land (6000-4400)

1,600.00

Depreciation

4,500.00

Accounts receivable (22900 - 20700)

2,200.00

Accounts payable (11800 - 27600)

(15,800.00)

NET CASH FROM OPERATING ACTIVITIES (A)

14,600.00

CASH FLOW FROM INVESTING ACTIVITIES

Sale of land

4,400.00

NET CASH FROM INVESTING ACTIVITIES (B)

4,400.00

CASH FLOW FROM FINANCING ACTIVITIES

Issue of common stock

3,000.00

Payment of dividend

(17,800.00)

NET CASH FROM FINANCING ACTIVITIES (C)

(14,800.00)

NET CHANGES IN CASH AND CASH EQUIVALENTS (A+B+C)

4,200.00

ADD: OPENING CASH AND CASH EQUIVALENTS

10,000.00

CLOSING CASH AND CASH EQUIVALENTS

14,200.00

Free cash flow for firm = Cash from operating activities - Capital expenditures = 14600 - 0 = 14600