Question
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash and cash equivalents $ 4.50 $ 8.00 Accounts receivable 38.00 31.00
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash and cash equivalents $ 4.50 $ 8.00 Accounts receivable 38.00 31.00 Inventory 77.50 63.60 Total current assets 120.00 102.60 Property, plant, and equipment 213.00 182.00 Less accumulated depreciation 40.80 30.60 Net property, plant, and equipment 172.20 151.40 Total assets $ 292.20 $ 254.00 Liabilities and Stockholders Equity Accounts payable $ 46.50 $ 40.00 Common stock 94.00 73.00 Retained earnings 151.70 141.00 Total liabilities and stockholders equity $ 292.20 $ 254.00 For this year, the company reported net income as follows: Sales $ 550.00 Cost of goods sold 330.00 Gross margin 220.00 Selling and administrative expenses 200.00 Net income $ 20.00 This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year. Required: 1. Using the indirect method, prepare a statement of cash flows for this year. 2. Compute Carmonos free cash flow for this year.
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