Exercise 11-47 (Algorithmic) Preparing the Statement of Cash Flows The comparative balance sheets for Beckwith Products Company are presented below. 2019 2018 Assets: Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation $ 36,950 75,100 45,300 256,400 38,650 $ 375,100 $ 25,000 78,000 36,000 153,000 20,000 Total assets $ 272,000 Liabilities and Equity: Accounts payable $ 13,100 11,500 Interest payable $ 11,000 8,000 9,000 Wages payable 8,100 Notes payable 105,100 90,000 50,000 Common stock 89,300 Retained earnings 104,000 148,000 $375,100 Total liabilities and equity $ 272,000 Additional Information: 1. Net income for 2019 was $58,400. 2. Cash dividends of $14,400 were declared and paid during 2019. 3. During 2019, Beckwith Issued $50,000 of notes payable and repaid $35,000 principal relating to notes payable. 4. Common stock was issued for $39,300 cash. 5. Depreciation expense was $18,750, and there were no disposals of equipment. Required: 1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2019. Use a minus sign to indicate any decreases in cash or cash outflows. 1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2019. Use a minus sign to indicate any decreases in cash or cash outflow Beckwith Products Company Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from operating activities: Net income $ 58,400 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense $ Decrease in accounts receivable Increase in inventory 18,750 2,900 -9,300 2,100 3,500 -900 Increase in accounts payable Increase in interest payable Decrease in wages payable / 17,050 $ 75,450 Net cash provided by operating activities Cash flows from investing activities: Equipment purchase $ - 103,400 - 103,400 Net cash used for investing activities Cash flows from financing activities: Cash received from issuance notes $ 50,000 Repayment of long-term liabilities -35,000 Cash received from stock issue 39,300 Payment of dividends -14,400 Net cash provided by financing activities 39,900 Net change in cash 11,950 25,000 Cash, 1/1/2019 Cash, 12/31/2019 36,950 2. Compute the following cash-based performance measures: a. Free cash flow b. Cash flow adequacy (Note: Assume that the average amount of debt maturing over the next 5 years is $85,000). Use two decimal places for the adequacy ratio. Enter negative values as negative numbers. Free cash flow $ 27,950 x 0.37 x Adequacy ratio