Homework Help is Here – Start Your Trial Now!
Business
Accounting
Required a. Calculate the change in cash that occurred during 2013. b. Prepare a statement of cash flows using the direct method, C. Compute free cash flow.

Required a. Calculate the change in cash that occurred during 2013. b. Prepare a statement of cash flows using the direct method, C. 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
See similar textbooks
icon
Related questions
Question
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 For the Year Ended December 31, 2013 Sales Revenue $635,000 Cost of Goods Sold $430,000 Wages Expense 86,000 Insurance Expense 8,000 Depreciation Expense 17,000 Interest Expense 9,000 Income Tax Expense 29,000 579,000 Net Income $56,000 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash $11,000 $5,000 Accounts Receivable 41,000 32,000 Inventory 90,000 60,000 Prepaid Insurance 5,000 7,000 Plant Assets 250,000 195,000 Accumulated Depreciation (68,000) (51,000) Total Assets $329.000 $248,000 Liabilities and Stockholders' Equity Accounts Payable $7,000 $10,000 9,000 6,000 Wages Payable Income Tax Payable 7,000 8,000 Bonds Payable 130,000 75,000 Common Stock 90,000 90,000 Retained Earnings 86,000 59,000 Total Liabilities and Stockholders' Equity $329,000 $248,000 Cash dividends of $29,000 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 free cash flow. 1112 P
Transcribed Image Text: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 For the Year Ended December 31, 2013 Sales Revenue $635,000 Cost of Goods Sold $430,000 Wages Expense 86,000 Insurance Expense 8,000 Depreciation Expense 17,000 Interest Expense 9,000 Income Tax Expense 29,000 579,000 Net Income $56,000 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash $11,000 $5,000 Accounts Receivable 41,000 32,000 Inventory 90,000 60,000 Prepaid Insurance 5,000 7,000 Plant Assets 250,000 195,000 Accumulated Depreciation (68,000) (51,000) Total Assets $329.000 $248,000 Liabilities and Stockholders' Equity Accounts Payable $7,000 $10,000 9,000 6,000 Wages Payable Income Tax Payable 7,000 8,000 Bonds Payable 130,000 75,000 Common Stock 90,000 90,000 Retained Earnings 86,000 59,000 Total Liabilities and Stockholders' Equity $329,000 $248,000 Cash dividends of $29,000 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 free cash flow. 1112 P
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cash Flow Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS