Muldur Corporation’s comparative balance sheets are presented below.

Additional information:

1. Net income was $18,300. Dividends declared and paid were $16,400.

2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $3,300.

3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.

Instructions

(a) Prepare a statement of cash flows for 2010 using the indirect method.

(b) Compute free cash flow.

Transcribed Image Text:

MULDUR CORPORATION Comparative Balance Sheets December 31 2010 2009 $ 17,700 22,300 $ 15,200 25,200 Cash Accounts receivable Investments 20,000 16,000 Equipment Accumulated depreciation 60,000 70,000 (14,000) (10,000) $106,400 $116,000 Total $ 14,600 10,000 50,000 $ 11,100 30,000 45,000 Accounts payable Bonds payable Common stock Retained earnings 31,800 29,900 $106,400 Total $116,000