9 10 11 12 13 Directions: A) Uring the information below and the template on the next tab, prepare a statement of cash flows (indirect method). B) Also using the template on the next tab, compute free cash flow Respond to the anlaysis question at the bottom of the template using the information prepared in A) and B) Helpful tip: If you need a refresher on how to complete this project, watch M2 Part 2: Example from Professor C. and the recording of the M2 dincamion session where the topics are covered! We Really Law Cush, Co. We Really Lowe Cash, Co. Comparative Balance Sheet Income Statement December 31 For the Year ended December 31, 2020 14 15 16 17 18 19 20 21 2020 2019 22 23 24 25 Asecta Cash Accounts Receivable Inventory Property, plant & equipment, net Total Assets $6,200 5,200 30,000 211,500 5252,900 34,100 5,500 14,200 215,300 $259,00 Sales revenue Cost of goods sold Gross profit Operating expenses Income from before gain and taxes on sale of equipment Income tax expense Net income $127.900 69 800 58,100 46,900 11,200 900 800 $11,300 27 28 10 31 Liabilities and Stockholders' Equity Accounts payable Accrued expenses Tuses puble Bonda peable Totallites Commons Retained in Tol Stockholden Equity Total Liabilities and Stockholders' Bquity $1,700 2,000 2.500 60,000 66.200 125,000 61,700 186,700 $2$2,900 $5,900 2,200 2,600 50.000 60,700 125,000 75,600 198,600 $259,300 8 9 30 32 33 34 35 36 37 Liabilities and Stockholders' Equity Accounts payable Accrued expenses Taxes payable Bonds payable Total liabilities Common stock Retained earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $1,700 2,000 2,500 60,000 66,200 125,000 61,700 186,700 $252,900 $5,900 2,200 2,600 50,000 60,700 125,000 73,600 198,600 $259,300 38 39 40 41 42 Additional data: 1. Depreciation expense of $1,900 is included in the Operating Expenses on the Income Statement 2. Equipment with an original cost of $35,000 was sold for $20,300. The gain on sale was $900. 3. On June 1, 2020, the company purchased new equipment for cash at a cost of $17,500. 4. The company paid $23,200 in cash dividends for the year. 43 44 45 Excel Project 2 - Template (CORRECTED) Insert Page Layout Formulas Data Review View Acrobat Garamond AAA- Wrap Text General B Merge & Center $ % ) Conditional Format Formatting as Tabla Call Styles F Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates 1 x fx Proceeds from sale of equipment D E We Really Love Cash, Co. Statement of Cash Flows For the year ended December 31, 2020 Cash flows from operating expenses Net Income 11,300 G In order to get full points for this project: 18 Rows in blue should accurately reflect financial con 9 Cells in green on the template should utilize formula 6 Cells in yellow show the proper format and order of 2 Cells in orange provides a correct response to the an 35 Total Points available $ Depreciation expense Gain on sale of equipment Decrease in accounts receivable Decrease in inventory Decrease in accounts payable Decrease in accured expenses Decreases in taxes payable Net cash provided by operating activities 1,900 (900) 300 4,200 (4,200) (200) (100) 1,000 12,00 Proceeds from sale of equipment Ending cash balance Femach G 22 23 24 25 26 27 Ending cash balance 28 29 30 B) Free Cash Flow, 31 32 33 34 35 35 37 38 39 40 C) You are in top management at We Really Love Cash, Co. Others in top management want to give MORE in cash dividends to investors. Based on the results of the Free Cash How calculation, do you agree that the company has the cash available to increase dividends to the investors right away? 44 45