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E5-15B (L05,6) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Garcia Corporation for the last two years at December 31. 2017 2016 Cash $442,500 450,000 130,000 745,000 (265,000) 335,000 400,000 767,500 $195,000 462,500 185,000 600,000 (222,500) 377,500 400,000 442,500 Accounts receivable Investments Equipment Less: Accumulated depreciation Current liabilities Capital stock Retained earnings Additional information: Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was $400,000. Instructions (a) Prepare a statement of cash flows for 2017 for Garcia Corporation. (b) Determine Garcia Corporation's free cash flow.

E5-15B (L05,6) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Garcia Corporation for the last two years at December 31. 2017 2016 Cash $442,500 450,000 130,000 745,000 (265,000) 335,000 400,000 767,500 $195,000 462,500 185,000 600,000 (222,500) 377,500 400,000 442,500 Accounts receivable Investments Equipment Less: Accumulated depreciation Current liabilities Capital stock Retained earnings Additional information: Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was $400,000. Instructions (a) Prepare a statement of cash flows for 2017 for Garcia Corporation. (b) Determine Garcia Corporation's 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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The cash flow is a little confusing for me. Please help me.

E5-15B (L05,6) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Garcia Corporation for the last two years at December 31. 2017 2016 Cash $442,500 450,000 130,000 745,000 (265,000) 335,000 400,000 767,500 $195,000 462,500 185,000 600,000 (222,500) 377,500 400,000 442,500 Accounts receivable Investments Equipment Less: Accumulated depreciation Current liabilities Capital stock Retained earnings Additional information: Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was $400,000. Instructions (a) Prepare a statement of cash flows for 2017 for Garcia Corporation. (b) Determine Garcia Corporation's free cash flow. E5-16B (L05,6) (Preparation of a Statement of Cash Flows) A comparative balance sheet for Gokhale Corporation is presented below. December 31 Assets 2017 2016 $ 33,000 $109,500 123,000 270,000 106,500 390,000 Cash Accounts receivable 99,000 283,500 165,000 300,000 Inventories Land Equipment Accumulated depreciation-equipment (103,500) (63,000) $817,500 Total $895,500 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings $ 51,000 $ 70,500 225,000 321,000 298,500 300,000 246,000 201,000 Total $895,500 $817,500 Additional information: 1. Net income for 2017 was $187,500. 2. Cash dividends of $90,000 were declared and paid. 3. Bonds payable amounting to $75,000 were retired through issuance of common stock. 4. Land was sold for cost. 5. Equipment was purchased but no equipment was sold.
Transcribed Image Text:E5-15B (L05,6) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Garcia Corporation for the last two years at December 31. 2017 2016 Cash $442,500 450,000 130,000 745,000 (265,000) 335,000 400,000 767,500 $195,000 462,500 185,000 600,000 (222,500) 377,500 400,000 442,500 Accounts receivable Investments Equipment Less: Accumulated depreciation Current liabilities Capital stock Retained earnings Additional information: Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was $400,000. Instructions (a) Prepare a statement of cash flows for 2017 for Garcia Corporation. (b) Determine Garcia Corporation's free cash flow. E5-16B (L05,6) (Preparation of a Statement of Cash Flows) A comparative balance sheet for Gokhale Corporation is presented below. December 31 Assets 2017 2016 $ 33,000 $109,500 123,000 270,000 106,500 390,000 Cash Accounts receivable 99,000 283,500 165,000 300,000 Inventories Land Equipment Accumulated depreciation-equipment (103,500) (63,000) $817,500 Total $895,500 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings $ 51,000 $ 70,500 225,000 321,000 298,500 300,000 246,000 201,000 Total $895,500 $817,500 Additional information: 1. Net income for 2017 was $187,500. 2. Cash dividends of $90,000 were declared and paid. 3. Bonds payable amounting to $75,000 were retired through issuance of common stock. 4. Land was sold for cost. 5. Equipment was purchased but no equipment was sold.
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