The comparative balance sheet of Morgensen Educational Supply at December 31, 2012, reported the following: Morgensen's transactions

Question:

The comparative balance sheet of Morgensen Educational Supply at December 31, 2012, reported the following:


December 31, 2012 2011 Current assets: $ 89,600 $ 24,500 Cash and cash cquivalents Accounts receivable 14,500 21,900 Inv


Morgensen's transactions during 2012 included the following:

The comparative balance sheet of Morgensen Educational Supply at


Requirements
1. Prepare the statement of cash flows of Morgensen Educational Supply for the year ended December 31, 2012. Use the indirect method to report cash flows from operating activities.
2. Evaluate Morgensen's cash flows for the year. Mention all three categories of cash flows and give the reason for your evaluation.
3. If Morgensen plans similar activity for 2013, what is its expected free cashflow?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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