Exercise 11-47 (Algorithmic) Preparing the Statement of Cash Flows

The comparative balance sheets for Beckwith Products Company are presented below.

	2019		2018
Assets:
Cash	$ 36,950		$ 25,000
Accounts receivable	75,100		78,000
Inventory	45,300		36,000
Property, plant, and equipment	256,400		153,000
Accumulated depreciation	38,650		20,000
Total assets	$ 375,100		$ 272,000
Liabilities and Equity:
Accounts payable	$ 13,100		$ 11,000
Interest payable	11,500		8,000
Wages payable	8,100		9,000
Notes payable	106,000		90,000
Common stock	93,800		50,000
Retained earnings	142,600		104,000
Total liabilities and equity	$375,100		$ 272,000

Additional Information:

1. Net income for 2019 was $58,400.
2. Cash dividends of $19,800 were declared and paid during 2019.
3. During 2019, Beckwith issued $50,000 of notes payable and repaid $35,000 principal relating to notes payable.
4. Common stock was issued for $43,800 cash.
5. Depreciation expense was $19,650, and there were no disposals of equipment.

Required:

1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2019. Use a minus sign to indicate any decreases in cash or cash outflows.

Beckwith Products Company
Statement of Cash Flows
For the Year Ended December 31, 2019
Cash flows from operating activities:
Net income		$
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$
Decrease in accounts receivable
Increase in inventory
Increase in accounts payable
Increase in interest payable
Decrease in wages payable
Net cash provided by operating activities			$
Cash flows from investing activities:
Equipment purchase		$
Net cash used for investing activities
Cash flows from financing activities:
Cash received from issuance notes		$
???????
Cash received from stock issue
Payment of dividends
Net cash provided by financing activities
Net change in cash			$
Cash, 1/1/2019
Cash, 12/31/2019			$

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2. Compute the following cash-based performance measures:

1. Free cash flow
2. Cash flow adequacy (Note: Assume that the average amount of debt maturing over the next 5 years is $85,000).

Use two decimal places for the adequacy ratio. Enter negative values as negative numbers.

Free cash flow	$
Adequacy ratio