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Foxboro Companys income statement for Year 2 follows: Foxboro Company Income Statement Sales $ 704,000 Cost of goods sold 68,000 Gross margin 636,000 Selling and

Foxboro Companys income statement for Year 2 follows:

Foxboro Company Income Statement
Sales $ 704,000
Cost of goods sold 68,000
Gross margin 636,000
Selling and administrative expenses 217,000
Net operating income 419,000
Gain on sale of equipment 7,000
Income before taxes 426,000
Income taxes 127,800
Net income $ 298,200

Its balance sheet amounts at the end of Years 1 and 2 are as follows:

Foxboro Company Balance Sheet
Year 2 Year 1
Assets
Cash $ 271,000 $ 28,000
Accounts receivable 253,000 143,000
Inventory 319,000 285,000
Prepaid expenses 10,000 20,000
Total current assets 853,000 476,000
Plant and equipment 621,000 512,000
Accumulated depreciation 165,500 130,900
Net plant and equipment 455,500 381,100
Loan to Harker Company 45,000 0
Total assets $ 1,353,500 $ 857,100
Liabilities and Stockholders' Equity
Accounts payable $ 311,000 $ 251,000
Accrued liabilities 50,000 58,000
Income taxes payable 85,700 81,100
Total current liabilities 446,700 390,100
Bonds payable 202,000 101,000
Total liabilities 648,700 491,100
Common stock 345,000 271,000
Retained earnings 359,800 95,000
Total stockholders' equity 704,800 366,000
Total liabilities and stockholders' equity $ 1,353,500 $ 857,100

Equipment that had cost $31,700 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $27,600. 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 for operating activities for Year 2. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)

Net cash (Click to select)provided byused in operating activities $

2.

Prepare a statement of cash flows for Year 2. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Foxboro Company Statement of Cash Flows
Operating activities:
(Click to select)Net lossNet income $
Adjustments to convert net income to cash basis:
(Click to select)Decrease in accrued liabilitiesIncrease in accrued liabilitiesIncrease in prepaid expensesIncrease in accounts receivableIncrease in inventoryIncrease in income taxes payableDecrease in accounts payableIncrease in accounts payableGain on sale of equipmentDecrease in inventoryDepreciationDecrease in prepaid expensesDecrease in accounts receivableDecrease in income taxes payable $
(Click to select)Increase in accounts payableIncrease in accounts receivableDecrease in inventoryGain on sale of equipmentDecrease in accounts payableDecrease in accrued liabilitiesIncrease in accrued liabilitiesDecrease in income taxes payableIncrease in income taxes payableDecrease in accounts receivableDecrease in prepaid expensesIncrease in inventoryIncrease in prepaid expensesDepreciation
(Click to select)Increase in accounts payableDecrease in accrued liabilitiesGain on sale of equipmentIncrease in inventoryDecrease in income taxes payableDecrease in accounts receivableIncrease in income taxes payableDecrease in inventoryIncrease in accounts receivableDepreciationIncrease in prepaid expensesIncrease in accrued liabilitiesDecrease in prepaid expensesDecrease in accounts payable
(Click to select)Decrease in prepaid expensesIncrease in accounts payableDecrease in income taxes payableDecrease in accounts receivableIncrease in prepaid expensesGain on sale of equipmentIncrease in accrued liabilitiesIncrease in accounts receivableIncrease in inventoryDepreciationDecrease in accounts payableDecrease in accrued liabilitiesDecrease in inventoryIncrease in income taxes payable
(Click to select)Decrease in accounts receivableDecrease in accrued liabilitiesIncrease in income taxes payableDecrease in accounts payableIncrease in accrued liabilitiesIncrease in prepaid expensesIncrease in accounts payableIncrease in inventoryDecrease in inventoryDecrease in income taxes payableIncrease in accounts receivableDecrease in prepaid expensesGain on sale of equipmentDepreciation
(Click to select)Decrease in prepaid expensesIncrease in inventoryDepreciationIncrease in accrued liabilitiesGain on sale of equipmentIncrease in accounts receivableDecrease in accounts receivableIncrease in income taxes payableDecrease in accounts payableIncrease in accounts payableDecrease in income taxes payableDecrease in inventoryIncrease in prepaid expensesDecrease in accrued liabilities
(Click to select)Decrease in prepaid expensesIncrease in accrued liabilitiesGain on sale of equipmentDecrease in accounts receivableDepreciationIncrease in inventoryDecrease in accounts payableIncrease in income taxes payableIncrease in accounts receivableDecrease in inventoryIncrease in prepaid expensesDecrease in accrued liabilitiesDecrease in income taxes payableIncrease in accounts payable
(Click to select)Decrease in income taxes payableIncrease in income taxes payableGain on sale of equipmentIncrease in accounts receivableDecrease in accrued liabilitiesIncrease in prepaid expensesDepreciationIncrease in inventoryIncrease in accounts payableDecrease in accounts payableDecrease in accounts receivableIncrease in accrued liabilitiesDecrease in prepaid expensesDecrease in inventory
Net cash (Click to select)provided byused in operating activities
Investing activities:
(Click to select)Decrease in prepaid expensesDecrease in inventoryProceeds from sale of equipmentIncrease in prepaid expensesDecrease in accounts receivableCash dividendsAdditions to plant and equipmentDepreciationIncrease in accounts payableDecrease in accounts payableIncrease in inventoryIncrease in accounts receivableLoan to Harker CompanyIssuance of bonds payable
(Click to select)Decrease in accounts receivableIncrease in prepaid expensesDepreciationDecrease in accounts payableDecrease in prepaid expensesProceeds from sale of equipmentIncrease in accounts payableLoan to Harker CompanyIssuance of bonds payableIncrease in inventoryIncrease in accounts receivableDecrease in inventoryCash dividendsAdditions to plant and equipment
(Click to select)Increase in prepaid expensesDecrease in accounts receivableDecrease in inventoryIncrease in accounts payableDepreciationAdditions to plant and equipmentDecrease in prepaid expensesIncrease in inventoryCash dividendsProceeds from sale of equipmentDecrease in accounts payableIncrease in accounts receivableIssuance of bonds payableLoan to Harker Company
Net cash (Click to select)provided byused in investing activities
Financing activities:
(Click to select)Decrease in accounts receivableIncrease in prepaid expensesAdditions to plant and equipmentCash dividendsIssuance of common stockDecrease in accounts payableLoan to Harker CompanyIncrease in accounts payableIncrease in inventoryProceeds from sale of equipmentDecrease in inventoryDecrease in prepaid expensesIssuance of bonds payableIncrease in accounts receivable
(Click to select)Increase in accounts payableDecrease in inventoryIssuance of common stockCash dividendsLoan to Harker CompanyDecrease in prepaid expensesAdditions to plant and equipmentProceeds from sale of equipmentDecrease in accounts payableIncrease in inventoryDecrease in accounts receivableIncrease in prepaid expensesIssuance of bonds payableIncrease in accounts receivable
(Click to select)Increase in accounts payableCash dividendsIncrease in inventoryDecrease in prepaid expensesIssuance of bonds payableDecrease in inventoryAdditions to plant and equipmentIssuance of common stockDecrease in accounts payableDecrease in accounts receivableIncrease in accounts receivableLoan to Harker CompanyIncrease in prepaid expensesProceeds from sale of equipment
Net cash (Click to select)used inprovided by financing activities
(Click to select)Net increase in cashNet decrease in cash
Cash balance, beginning of year
Cash balance, end of year $

3.

Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)

Free cash flow $

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