Midwest Co. reported the following items in the most recent year:
Net income .................................................. $40,000
Dividends paid ................................................. 5,000
Increase in accounts receivable ............................. 10,000
Increase in accounts payable ................................ 7,000
Purchase of equipment ....................................... 8,000
Depreciation expense ......................................... 4,000
Issue of notes payable for cash ............................ 20,000
(a) Calculate net cash provided (used) by operating activities, the net change in cash during the year, and free cash flow. Dividends paid are treated as financing activities. Midwest uses the indirect method for its Statement of Cash Flows.
(b) Assuming Midwest had 100,000 common shares outstanding for the entire year, calculate cash flow per share to be included in the financial statements if Midwest follows IFRS and chooses to disclose the ratio.
(c) How would your answer to part (b) change if Midwest follows ASPE?