Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Joyner Companys income statement for Year 2 follows: Sales $ 719,000 Cost of goods sold 177,000 Gross margin 542,000 Selling and administrative expenses 216,000 Net

Joyner Companys income statement for Year 2 follows:

Sales $ 719,000
Cost of goods sold 177,000
Gross margin 542,000
Selling and administrative expenses 216,000
Net operating income 326,000
Nonoperating items:
Gain on sale of equipment 6,000
Income before taxes 332,000
Income taxes 132,800
Net income $ 199,200

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

Year 2 Year 1
Assets
Cash and cash equivalents $ 137,800 $ 32,000
Accounts receivable 278,000 145,000
Inventory 319,000 285,000
Prepaid expenses 9,000 18,000
Total current assets 743,800 480,000
Property, plant, and equipment 621,000 519,000
Less accumulated depreciation 165,000 131,500
Net property, plant, and equipment 456,000 387,500
Loan to Hymans Company 48,000 0
Total assets $ 1,247,800 $ 867,500
Liabilities and Stockholders' Equity
Accounts payable $ 317,000 $ 262,000
Accrued liabilities 47,000 52,000
Income taxes payable 84,200 80,500
Total current liabilities 448,200 394,500
Bonds payable 203,000 103,000
Total liabilities 651,200 497,500
Common stock 334,000 275,000
Retained earnings 262,600 95,000
Total stockholders' equity 596,600 370,000
Total liabilities and stockholders' equity $ 1,247,800 $ 867,500

Equipment that had cost $30,500 and on which there was accumulated depreciation of $11,400 was sold during Year 2 for $25,100. 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.

Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.)

Joyner Company
Statement of Cash FlowsIndirect Method (partial)
Net income

Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.)

Joyner Company
Statement of Cash Flows
For Year 2
Operating activities:
Investing activities:
0
Financing activities:
0
0
Beginning cash and cash equivalents
Ending cash and cash equivalents $0

compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.)

Free cash flow

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

GAO Financial Audit Manual Volume 3 June 2018

Authors: United States Government GAO

2018 Edition

979-8733166001

More Books

Students also viewed these Accounting questions

Question

2. How are individual tastes encoded?

Answered: 1 week ago

Question

Describe ERP and how it can create efficiency within a business

Answered: 1 week ago

Question

1. Identify three communication approaches to identity.

Answered: 1 week ago

Question

d. Who are important leaders and heroes of the group?

Answered: 1 week ago

Question

3. Describe phases of minority identity development.

Answered: 1 week ago