tement of Cash Flows (Indirect Method) eWolff 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 ost of Goods Sold $473.000 94.600 Nages Expense mourance Expense Depredation Expense interest Expense income Tax Expense 8.800 18.700 9.900 31.900 636.900 Net income S61.600 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash $12.100 $5.500 Accounts Recenvable 45100 35.200 Inventory 99.000 66.000 Prepaid insuurance 5.500 7,700 Plart Assets 275.000 214.500 Accumulated Depreciation Total Assets (7400) 56.100) $361.900 $272.800 Liabilities and Stockholders Equity Accounts Payable $7.700 $11.000 Wages Payable 9.900 6.600 income Tax Payable 7.700 800 Bonds Payable Common Stock 143.000 82.500 99.000 90.000 Retaned Earrings 94600 64.900 Total Liablibes and Stockholders tquity $361.900 $272.00 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 p Required a Calculate the change in cash that occurred duning 2013. b. Prepare a statement of cash flows using the indirect method. Compute free cash flow.
tement of Cash Flows (Indirect Method) eWolff 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 ost of Goods Sold $473.000 94.600 Nages Expense mourance Expense Depredation Expense interest Expense income Tax Expense 8.800 18.700 9.900 31.900 636.900 Net income S61.600 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash $12.100 $5.500 Accounts Recenvable 45100 35.200 Inventory 99.000 66.000 Prepaid insuurance 5.500 7,700 Plart Assets 275.000 214.500 Accumulated Depreciation Total Assets (7400) 56.100) $361.900 $272.800 Liabilities and Stockholders Equity Accounts Payable $7.700 $11.000 Wages Payable 9.900 6.600 income Tax Payable 7.700 800 Bonds Payable Common Stock 143.000 82.500 99.000 90.000 Retaned Earrings 94600 64.900 Total Liablibes and Stockholders tquity $361.900 $272.00 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 p Required a Calculate the change in cash that occurred duning 2013. b. Prepare a statement of cash flows using the indirect method. Compute free cash flow.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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