Question
Assets 2017 2018 Cash $33,000 $18,000 Accounts Receivable 14,000 25,000 Inventory 25,000 45,000 Equipment 78,000 70,000 Accumulated Depreciation Equipment (24,000) (27,000) Net Equipment 54,000 43,000
Assets 2017 2018
Cash $33,000 $18,000
Accounts Receivable 14,000 25,000
Inventory 25,000 45,000
Equipment 78,000 70,000
Accumulated Depreciation Equipment (24,000) (27,000)
Net Equipment 54,000 43,000
Total Assets 126,000 131,000
Liabilities and Stockholders Equity
Accounts Payable $43,000 $31,000
Income taxes payable 20,000 24,000
Bonds payable 10,000 20,000
Total Liabilities 73,000 75,000
Common stock 25,000 25,000
Retained Earnings 28,000 31,000
Total Equity 53,000 56,000
Total Liabilities + Equity 126,000 131,000
Presented below is the income statement for ABC Company for 2018:
Sales revenue $286,000
COGS 204,000
Gross Profit 82,000
Operating Expenses 37,000
Income from operations 45,000
Interest expense 7,000
Income before income taxes 38,000
Income tax expense 10,000
Net income 28,000
Additional Information:
Depreciation expense was $6,000
Dividends of $25,000 were declared and paid
During the year, equipment was sold for $12,000 cash. This equipment cost $15,000 originally and had accumulated depreciation of $3,000 at the time of sale.
Additional equipment was purchased for $7,000 cash.
Prepare the statement of cash flows and compute free cash flow for ABC Company.
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