Joyner Companys income statement for Year 2 follows: Sales $ 714,000 Cost of goods sold 358,000 Gross
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Question:
Joyner Company’s income statement for Year 2 follows:
Sales | $ | 714,000 |
Cost of goods sold | 358,000 | |
Gross margin | 356,000 | |
Selling and administrative expenses | 217,000 | |
Net operating income | 139,000 | |
Nonoperating items: | ||
Gain on sale of equipment | 7,000 | |
Income before taxes | 146,000 | |
Income taxes | 58,400 | |
Net income | $ | 87,600 |
Its balance sheet amounts at the end of Years 1 and 2 are as follows:
Year 2 | Year 1 | ||||
Assets | |||||
Cash and cash equivalents | $ | 47,400 | $ | 110,600 | |
Accounts receivable | 258,000 | 119,000 | |||
Inventory | 320,000 | 270,000 | |||
Prepaid expenses | 9,500 | 19,000 | |||
Total current assets | 634,900 | 518,600 | |||
Property, plant, and equipment | 628,000 | 507,000 | |||
Less accumulated depreciation | 166,200 | 131,700 | |||
Net property, plant, and equipment | 461,800 | 375,300 | |||
Loan to Hymans Company | 44,000 | 0 | |||
Total assets | $ | 1,140,700 | $ | 893,900 | |
Liabilities and Stockholders' Equity | |||||
Accounts payable | $ | 318,000 | $ | 267,000 | |
Accrued liabilities | 50,000 | 59,000 | |||
Income taxes payable | 85,900 | 80,900 | |||
Total current liabilities | 453,900 | 406,900 | |||
Bonds payable | 202,000 | 108,000 | |||
Total liabilities | 655,900 | 514,900 | |||
Common stock | 337,000 | 286,000 | |||
Retained earnings | 147,800 | 93,000 | |||
Total stockholders' equity | 484,800 | 379,000 | |||
Total liabilities and stockholders' equity | $ | 1,140,700 | $ | 893,900 | |
Equipment that had cost $31,700 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $27,600. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.
Required:
1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2.
2. Prepare a statement of cash flows for Year 2.
3. Compute the free cash flow for Year 2.
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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