tement of Cash Flows (Indirect Method) e 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 ales Revenue 5698.500 Cost of Goods Sold Mages Expense insurance Expense Depredation Expense interest Expense $473.000 94.600 8.800 18.700 9.900 Income Tax Expense 31.900 636900 Net income $61.600 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash $12.100 $5.500 Accounts Recenable 45.100 35.200 Inventory 99.000 66.000 Prepaid inturance Pant Assets 5.500 7.700 275.000 214500 Accumulated Depreciation (74800) (56100) $272.800 Total Assets $361.900 Liabilities and Stockholders tquity Accounts Payable Wages Payable income Tax Payable Bonds Payable Common Stock Retaned Eamings $7.700 $11,000 9.900 6.600 7,700 800 143.000 82.500 99.000 99.000 64.900 94.600 1361.900 Total Liabies and Stockholders Equity 24272.800

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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How do I prepare a statement of cash flows using the indirect method? 

Statement of Cash Flows (Indirect 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
$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
Dec. 31, 2013 Dec. 31, 2012
Assets
Cash
$12,100
$5,500
Accounts Receivable
45,100
35,200
Inventory
99,000
66,000
Prepaid Insurance
5,500
7,700
Plant Assets
275,000
214,500
Accumulated Depreciation
(74,800)
(56,100)
Total Assets
$361,900
$272,800
Liabilities and Stockholders'' Equity
Accounts Payable
$7,700
$11,000
Wages Payable
Income Tax Payable
9,900
6,600
7,700
8,800
Bonds Payable
143,000
82,500
Common Stock
99,000
99,000
Retained Earnings
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 indirect method.
C. Compute free cash flow.
Transcribed Image Text:Statement of Cash Flows (Indirect 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 $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 Dec. 31, 2013 Dec. 31, 2012 Assets Cash $12,100 $5,500 Accounts Receivable 45,100 35,200 Inventory 99,000 66,000 Prepaid Insurance 5,500 7,700 Plant Assets 275,000 214,500 Accumulated Depreciation (74,800) (56,100) Total Assets $361,900 $272,800 Liabilities and Stockholders'' Equity Accounts Payable $7,700 $11,000 Wages Payable Income Tax Payable 9,900 6,600 7,700 8,800 Bonds Payable 143,000 82,500 Common Stock 99,000 99,000 Retained Earnings 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 indirect method. C. Compute free cash flow.
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