Hassan Corporation’s comparative balance sheets are presented below. HASSAN CORPORATION Comparative Balance Sheets December 31 2020 2019 Cash $ 27,200 $ 17,700 Accounts receivable 24,200 22,300 Investments 20,000 20,000 Equipment 60,000 70,000 Accumulated depreciation – Equipment (14,000) (10,000) Total $117,400 $116,000 Accounts payable $ 19,600 $ 11,100 Bonds payable 10,000 30,000 Common stock 55,000 45,000 Retained earnings 32,800 29,900 Total $117,400 $116,000 Additional information: Net income was $34,300. Dividends declared and paid were $31,400. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $5,300. No noncash investing and financing activities occurred during 2020. Instructions Prepare a statement of cash flows for 2020 using the indirect method. Compute free cash flow.
Hassan Corporation’s comparative balance sheets are presented below. HASSAN CORPORATION Comparative Balance Sheets December 31 2020 2019 Cash $ 27,200 $ 17,700 Accounts receivable 24,200 22,300 Investments 20,000 20,000 Equipment 60,000 70,000 Accumulated depreciation – Equipment (14,000) (10,000) Total $117,400 $116,000 Accounts payable $ 19,600 $ 11,100 Bonds payable 10,000 30,000 Common stock 55,000 45,000 Retained earnings 32,800 29,900 Total $117,400 $116,000 Additional information: Net income was $34,300. Dividends declared and paid were $31,400. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $5,300. No noncash investing and financing activities occurred during 2020. Instructions Prepare a statement of cash flows for 2020 using the indirect method. Compute free cash flow.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
- Hassan Corporation’s comparative
balance sheets are presented below.
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HASSAN CORPORATION |
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Comparative Balance Sheets |
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December 31 |
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2020 |
|
2019 |
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Cash |
$ 27,200 |
$ 17,700 |
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24,200 |
22,300 |
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Investments |
20,000 |
20,000 |
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Equipment |
60,000 |
70,000 |
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(14,000) |
(10,000) |
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Total |
$117,400 |
$116,000 |
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|
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|
|
|
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Accounts payable |
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$ 19,600 |
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$ 11,100 |
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Bonds payable |
10,000 |
30,000 |
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Common stock |
55,000 |
45,000 |
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32,800 |
29,900 |
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Total |
$117,400 |
$116,000 |
Additional information:
- Net income was $34,300. Dividends declared and paid were $31,400.
- Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $5,300.
- No noncash investing and financing activities occurred during 2020.
Instructions
- Prepare a statement of
cash flows for 2020 using the indirect method.
- Compute
free cash flow .
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