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.
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73a0c5c9-accb-4c3e-9013-d1f14ecca412%2F47ef7a91-0cca-4bcb-a35c-01fd1e8b192f%2Fqu4r2jb_processed.jpeg&w=3840&q=75)
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73a0c5c9-accb-4c3e-9013-d1f14ecca412%2F47ef7a91-0cca-4bcb-a35c-01fd1e8b192f%2F9wrwy5e_processed.png&w=3840&q=75)
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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