Chapter 13 Q 3

Income taxes payable		85,000			81,900
Total current liabilities		449,000			390,900
Bonds payable		207,000			114,000
Total liabilities		656,000			504,900
Common stock		335,000			275,000
Retained earnings		277,380			90,000
Total stockholders' equity		612,380			365,000
Total liabilities and stockholders' equity	$	1,268,380		$	869,900

Equipment that had cost $30,600 and on which there was accumulated depreciation of $10,700 was sold during Year 2 for $27,900. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.

Required:

1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2.

2. Prepare a statement of cash flows for Year 2.

3. Compute the free cash flow for Year 2.

Joyner Company's income statement for Year 2 follows: $ 707,000 201,000 506,000 151,200 354,800 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment Income before taxes Income taxes Net income 8,000 362,800 145, 120 $ 217,680 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities $ 202,380 227,000 319,000 10,500 758,880 629,000 166,500 462,500 47,000 $1,268,380 $ 47,400 139,000 281,000 21,000 488,400 513,000 131,500 381,500 0 $869,900 $ 316,000 48,000 $ 251,000 58,000