> O a ezto.mheducation.com/hm.tpx Exercise 12-6 Prepare a Statement of Cash Flow

Question

> O a ezto.mheducation.com/hm.tpx Exercise 12-6 Prepare a Statement of Cash Flows, Free Cash Flow [LO12-1, LO12-2, LO12-3 Comparative financial statement data for Carmono Company follow This Year Last Year Assets Cash Accounts receivable Inventory S 16.00 S 31.00 84.00 77.00 13500 123.40 Total current assets 235.00 231.40 Property. plant, and equipment 28200 228.00 59.20 44.40 Less accumulated depreciation Net proparty, plant, and equipment 222 80 183.60 Total assets $457 80 $415 00 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings s 81.00 S 63.00 186.00 142.00 190.80 210.00 Total liabilities and stockholders equity $ 457 80 $ 415.00 For this year, the company reported net income as follows Sales Cost of goods sold $1,700 00 1,020 00 680.00 Gross margin Seling and administrative expens 660.00 Net income s 2000 This year Carmono declared and paid a cash dividend There were no sales of property, plant, and O Type here to search

Explanation / Answer

STATEMENT OF CASH FLOW Amount in $ Amount in $ Net income $                20.00 Cash flows from operating activities Adjustments for: Depreciation $                14.80 $                14.80 Effects/ changes in Assets & Liabilities (Increase) / Decrease in Account receivables $                -7.00 Inventory Decrease / (Increase) $              -11.60 Accounts payable Increase / ( Decrese) $                18.00 $                -0.60 Net cash from operating activities $                34.20 Cash flows from investing activities Purchase of property , plant and equipment $              -54.00 Net cash used in investing activities $              -54.00 Cash flows from Financing activities Dividend Paid $              -39.20 Issue of common sTock $                44.00 Net cash used in financing activities $                  4.80 Net increase in cash and cash equivalents $              -15.00 Add :Cash and cash equivalents at beginning of period $                31.00 Cash and cash equivalents at end of period $                16.00 Working Notes: 1) Dividend Calculation Net Profit = $                20.00 Add: Opening Retained Earning $             210.00 Less: Closing $             190.80 Dividend Paid of the year $                39.20 Answer =2: Calculation of the free cash flow of the company Free Cash Flow = Net Cash flow from operating Activities - Investment in the Capital expenditure Free Cash Flow = $ 34.20 - $ 54 Free Cash Flow = - $ 19.80

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.