A Data for Warner Company are presented in P12-7A. Further analysis reveals the following. In P12-7A, 1.

Question:

A Data for Warner Company are presented in P12-7A. Further analysis reveals the following.

In P12-7A,

1. Accounts payable pertain to merchandise suppliers.

2. All operating expenses except for depreciation were paid in cash.

3. All depreciation expense is in the selling expense category.

4. All sales and purchases are on account.

A Presented below are the financial statements of Warner Company.

A Data for Warner Company are presented in P12-7A. Further

Additional data:
1. Depreciation expense was $17,500.
2. Dividends declared and paid were $20,000.
3. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had accumulated depreciation of $9,500 at the time of sale.
Instructions
(a) Prepare a statement of cash flows for Warner Company using the direct method.
(b) Compute free cash flow.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Accounting Tools for Business Decision Making

ISBN: 978-1118096895

6th edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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