The comparative balance sheets for Beckwith Products Company are presented below. Additional information: 1. Net income for
Question:
The comparative balance sheets for Beckwith Products Company are presented below.
Additional information:
1. Net income for 2009 was $52,000.
2. Cash dividends of $16,000 were declared and paid during 2009.
3. During 2009, Beckwith issued $20,000 of notes payable and repaid $35,000 principal relating to notes payable.
4. Common stock was issued for $40,000 cash.
5. Depreciation expense was $10,000, and there were no disposals of equipment.
Required:
1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2009.
2. Compute the following cash-based performance measures:
a. Free cash flow
b. Cash flow adequacy (assume that the average amount of debt maturing over the next five years is $85,000).
3. List the major reasons for the difference between net income and net cash flow from operatingactivities.
Step by Step Answer:
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger