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1). Prepare a statement of cash flows using the indirect method. 2.) Compute free cash flow.

1). Prepare a statement of cash flows using the indirect method. 2.) Compute free cash flow.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vaughn Manufacturing Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Net income Additional data: $30,600 10,200 $411,400 297,500 113,900 40,800 73,100 5,100 68,000 13,600 $54,400 1. Depreciation expense was $29,750. 2. Dividends declared and paid were $34,000. 3. During the year equipment was sold for $14,450 cash. This equipment cost $30,600 originally and had accumulated depreciation of $16,150 at the time of sale. 1). Prepare a statement of cash flows using the indirect method. 2.) Compute free cash flow.
Transcribed Image Text:Vaughn Manufacturing Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Net income Additional data: $30,600 10,200 $411,400 297,500 113,900 40,800 73,100 5,100 68,000 13,600 $54,400 1. Depreciation expense was $29,750. 2. Dividends declared and paid were $34,000. 3. During the year equipment was sold for $14,450 cash. This equipment cost $30,600 originally and had accumulated depreciation of $16,150 at the time of sale. 1). Prepare a statement of cash flows using the indirect method. 2.) Compute free cash flow.
Presented below are the financial statements of Vaughn Manufacturing. Assets Cash Accounts receivable Vaughn Manufacturing Comparative Balance Sheets December 31 Inventory Property, plant, and equipment Accumulated depreciation Total Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total 2017 $59,500 34,000 47,600 102,000 132,600 (54,400) (40,800) $188,700 $183,600 $32,300 11,900 2016 28,900 $ 34,000 23,800 34,000 $ 25,500 13,600 56,100 23,800 30,600 85,000 $188,700 $183,600 64,600
Transcribed Image Text:Presented below are the financial statements of Vaughn Manufacturing. Assets Cash Accounts receivable Vaughn Manufacturing Comparative Balance Sheets December 31 Inventory Property, plant, and equipment Accumulated depreciation Total Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total 2017 $59,500 34,000 47,600 102,000 132,600 (54,400) (40,800) $188,700 $183,600 $32,300 11,900 2016 28,900 $ 34,000 23,800 34,000 $ 25,500 13,600 56,100 23,800 30,600 85,000 $188,700 $183,600 64,600
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