Prepare a statement of cash flows - indirect method, and compute free cash flow.

Additional data:
1. Dividends declared and paid were $20,000.
2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000
originally and had a book value of $8,500 at the time of sale.
3. All depreciation expense, $14,500, is in the operating expenses.
4. All sales and purchases are on account.
Instructions
(a) Prepare a statement of cash flows using the indirect method.
(b) Compute free cash flow.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a) NOSKER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities

Transcribed Image Text:

NOSKER COMPANY Comparative Balance Sheet December 31 2017 2016 Assets Cash Accounts Receivable Inventory Equipment Accumulated depreciatioh-equipment $38,000 30,000 27,000 60,000 (29,000) $126,000 $20,000 14,000 20,000 78,000 (24,000) $108,000 Total Liabilities and Stockholders Equity Accounts payable Income taxes payable Bondspayable Common stock Retained eamings $24,000 7,000 27,000 18,000 50,000 $126,000 $15,000 8,000 33,000 14,000 38,000 $108,000 Total NOSKER COMPANY Income Statement Forthe Yearended December31,2017 Sales revenue Cost ofgoods sold Grossprofit Operating expenses Income fromoperations Interest expense Income before income taxes Income tax expense Netincome $242,000 175,000 67,000 24,000 43,000 3,000 40,000 8,000 $32,000 Net income Adjustments to reconcile net income to net cash provided by operating activities Value Depreciation expense Increase in accounts receivable Increase in inventory Increase in accounts payable Decrease in income taxes payable Net cash provided by operating activities Value Value Value Value Value ? Cash flows from investing activities Sale of equipment Value Net cash provided by investing activities Value Cash flows from financing activities Issuance of common stock Redemption of bonds Payment of dividend:s Value Value Value Net cash used by financing activities Net increase in cash Cash at beginning of period Cash at end of period Value (b) Free Cash Flow: Net cash provided by operating activiti Less: Capital expenditures es Value Value Value Cash dividends