D and E Statement of Cash Flows (Direct Method) The Wolff Company's income statement and comparative balance sheets at December 31 of 2013 and 2012 are shown below: WOLFF COMPANY Income Statement
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D and E
Statement of Cash Flows (Direct Method)
The Wolff Company's income statement and comparative
| WOLFF COMPANY Income Statement For the Year Ended December 31, 2013 |
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|---|---|---|
| Sales Revenue | $698,500 | |
| Cost of Goods Sold | $473,000 | |
| Wages Expense | 94,600 | |
| Insurance Expense | 8,800 | |
| Depreciation Expense | 18,700 | |
| Interest Expense | 9,900 | |
| Income Tax Expense | 31,900 | 636,900 |
| Net Income | $61,600 |
| WOLFF COMPANY Balance Sheets |
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|---|---|---|
| Dec. 31, 2013 | Dec. 31, 2012 | |
| Assets | ||
| Cash | $12,100 | $5,500 |
| 45,100 | 35,200 | |
| Inventory | 99,000 | 66,000 |
| Prepaid Insurance | 5,500 | 7,700 |
| Plant Assets | 275,000 | 214,500 |
| (74,800) | (56,100) | |
| Total Assets | $361,900 | $272,800 |
| Liabilities and |
||
| Accounts Payable | $7,700 | $11,000 |
| Wages Payable | 9,900 | 6,600 |
| Income Tax Payable | 7,700 | 8,800 |
| Bonds Payable | 143,000 | 82,500 |
| Common Stock | 99,000 | 99,000 |
| 94,600 | 64,900 | |
| Total Liabilities and Stockholders' Equity | $361,900 | $272,800 |
Cash dividends of $31,900 were declared and paid during 2013. Plant assets were purchased for cash and bonds payable were issued for cash. Bond interest is paid semi-annually on June 30 and December 31. Accounts payable relate to merchandise purchases.
Required
a. Calculate the change in cash that occurred during 2013.
b. Prepare a statement of cash flows using the direct method.
c. Compute
d. Compute the operating-cash-flow-to-
e. Compute the operating-cash-flow-to-capital-expenditures ratio.
a. Change in Cash during 2013 $Answer
Answer
b. Use a negative sign with
| WOLFF COMPANY Statement of Cash Flows For Year Ended December 31, 2013 |
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|---|---|---|
| Cash Flow from Operating Activities | ||
| Cash Received from Customers | Answer
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| Cash paid for Merchandise Purchased | Answer
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| Cash Paid to Employees | Answer
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| Cash Paid as Insurance | Answer
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| Cash Paid for Interest | Answer
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| Cash Paid as Income Taxes | Answer
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Answer
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| Cash Provided by Operating Activities | Answer
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| Cash Flow from Investing Activities | ||
| Purchase of Plant Assets | Answer
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| Cash Flow from Financing Activities | ||
| Issuance of Bonds Payable | Answer
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| Payment of Dividends | Answer
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| Cash Provided by Financing Activities | Answer
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| Net Change in Cash | Answer
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| Cash at Beginning of Year | Answer
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| Cash at End of Year | Answer
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c. Free cash flow $Answer
d. Operating-cash-flow-to-current-liabilities ratio.
Round answer to two decimal places.
Answer
e. Operating-cash-flow-to-capital-expenditures ratio.
Round answer to two decimal places.
Answer
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