Condensed financial data of Wanwright Company are shown below. Wanwright reports under ASPE. WANWRIGHT COMPANYIncome StatementFor the
Question:
Condensed financial data of Wanwright Company are shown below. Wanwright reports under ASPE.
WANWRIGHT COMPANYIncome StatementFor the Year Ended December 31, 2021
Sales .................................................................. $297,500Gain on sale of plant assets ................................. 5,000..............................................................................302,500
Less:Cost of goods sold ............................................ 119,460Operating expenses ........................................... 14,670Depreciation expense ........................................ 35,500Income taxes ....................................................... 27,270Interest expense ................................................... 2,940Total expenses .................................................. 199,840Profit ................................................................ $102,660
Additional information:
1. New plant assets costing $141,000 were purchased for cash during the year.
2. Long-term investments were sold at cost.
3. Plant assets costing $36,000 were sold for $15,000, resulting in a gain of $5,000.
4. A cash dividend of $38,000 was declared and paid during the year.
Instructions
a. Prepare a statement of cash flows using the indirect method.
b. Calculate the free cash flow.
Taking It Further
If a company has a loss, does that mean that there has also been a net reduction in cash from operating activities? Explain.
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak