**Please include calculations. Thank you!

123 2 BUS 7013 - Managerial Accounting Cash Flow Statement Amount Calculations - Chapter 15 Beginning End of year of year Change Income statement 86,000 54,000 32,000 Sales 112,000 128,000 (16,000) Cost of goods sold 141,000 118,000 23,000 Gross profit Operating expenses 18,000 21,000 (3,000) 357,000 321,000 36,000 298,000 240,000 58,000 (100,000) (76,000) (24,000) 198,000 164,000 34,000 555,000 485,000 70,000 Income from operations Other income & (expense): Interest expense Interest income Gain on sale of equipment Total other expense 89,000 71,000 18,000 Income before taxes 6,000 7,000 (1,000) Income tax expense 3,000 7,000 (4,000) Net income 98,000 85,000 13,000 225,000 260,000 (35,000) 323,000 345,000 (22,000) 75,000 50,000 25,000 100,000 70,000 30,000 57,000 20,000 37,000 232,000 140,000 92,000 555,000 485,000 70,000 4 5 Balance sheet 7 Cash 8 Accounts receivable 9 Inventory 10 Prepaid expenses 11 Total current assets 12 Equipment, at cost 13 Less: Accum. depreciation 14 Net equipment 15 Total assets 16 17 Accounts payable 18 Interest payable 19 Dividends payable 20 Total current liabilities 21 Long-term debt 22 Total liabilities 23 Common stock 24 Additional paid-in capital 25 Retained earnings 26 Total stockholders' equity 27 Total liabilities and equity 28 Current year 800,000 (600,000) 200,000 (130,000) 70,000 (7,500) 2,000 4,500 (1,000) 69,000 (20,000) 49,000 28 29 Refer to the balance sheets and income statement above to answer the following questions. 30 Also, circle the type of activity (operating, investing or financing) at the right. 31 Activity 32 Additional Information: 33 1. Depreciation expense is only included in operating expenses. 34 2. There were purchases of equipment of $76,000 during the year. O, I, F 35 3. Equipment with a book value of $14,000 was sold during the year. 36 4. There were principal payments on long-term debt (notes payable) during the year of $95,000. 37 O, I, F 38 (A) Calculate the amount of proceeds from the sale of equipment during the year. O, I, F 39 40 41 42 43 (B) Calculate the amount of depreciation expense during the year. O, I, F 44 45 46 47 48 (C) Calculate the amount of proceeds from borrowing new long-term debt. O, I, F 49 50 51 52 (D) Calculate the amount common stock issued during the year. O, I, F 53 54 55 56 (E) Calculate the amount of dividends paid during the year. O, I, F 57 58 59 Statement of Cash Flows - Indirect Method 61 62 63 Cash Flow from Operating Activities: 64 Net income 49,000 65 Depreciation expense 66 Gain on sale of equipment 67 Change in accounts receivable Change in inventory 68 69 Change in prepaid expenses Change in accounts payable 70 71 Change in interest payable 72 73 Net cash flow from operating activies 49,000 74 75 Cash Flow from Investing Activities: 76 Proceeds from the sale of equipment Purchase of equipment 77 78 79 Net cash flow from investing activities 80 81 Cash Flow from Financing Activities: 82 Proceeds from issuance of long-term debt Principal payments on long-term debt 83 84 Proceeds from issuance of common stock 85 Dividends paid 86 87 Net cash flow from financing activities 88 89 Net increase / (decrease) in cash 49,000 90 91 Cash at beginning of year 92 93 Cash at end of year $ 49,000 94 95 96 Additional Question: 98 What is the amount of free cash flow for this company for the year? 99 1 Statement of Cash Flows -- Troubleshooting Homework Why doesn't this balance? Please fix it. (There could be up to 5 mistakes.) 3 Current End of Beginning year Balance sheet of year Change Income statement year 6 Cash 76,000 Sales 900,000 42,000 34,000 107,000 9,000 116,000 700,000 7 Accounts receivable 8 Inventory 88,000 94,000 (6,000) 200,000 9 Total current assets 280,000 243,000 37,000 135,000 10 Equipment, at cost Cost of goods sold Gross profit Operating expenses Income from operations Other income & (expense): Interest expense Interest income 65,000 280,000 210,000 70,000 (80,000) (67,000) (13,000) 200,000 143,000 57,000 480,000 386,000 94,000 11 Less: Accum. depreciation 12 Net book value of equipment 13 Total assets (12,500) 1,500 14 Loss on sale of equipment (4,000) 15 Accounts payable 70,000 81,000 (11,000) Total other income/(expense) (15,000) 16 Interest payable 7,000 4,000 3,000 Income before taxes 50,000 17 Total current liabilities 77,000 85,000 (8,000) Income tax expense 20,000 30,000 18 Notes payable 235,000 176,000 59,000 Net income 19 Total liabilities 312,000 261,000 51,000 20 Common stock 40,000 30,000 10,000 21 Additional paid-in capital 25,000 20,000 5,000 22 Retained earnings 103,000 75,000 28,000 23 Total S.H. equity 168,000 125,000 43,000 24 Total liabilities & equity 480,000 386,000 94,000 25 26 Additional information: Equipment that originally cost 15,000 with accumulated depreciation of 8,000 27 was sold during the year for cash. The company also had 75,000 of new borrowing during the year. 28 Depreciation expense is included as part of the amount for operating expenses in the income statement. 123 1600-0 Statement of Cash Flows - Indirect Method 30 32 Cash Flow from Operating Activities: 33 Net income 34 Depreciation expense 35 Loss on sale of equipment Change in accounts receivable 37 Change in inventory 36 38 Change in accounts payable Change in interest payable 39 41 Net cash flow from operating activies 42 43 Cash Flow from Investing Activities: 44 Proceeds from the sale of equipment Purchases of equipment 45 47 Net cash flow from investing activities 48 49 Cash Flow from Financing Activities: 50 Proceeds from issuance of long-term debt 51 Principal payments on long-term debt 52 Proceeds from issuance of common stock Dividends paid 53 55 Net cash flow from financing activities 56 57 Net increase/(decrease) in cash 58 Cash at beginning of year 59 Cash at end of year Incorrect version Correct amounts 30,000 13,000 4,000 (9,000) 6,000 11,000 3,000 58,000 3,000 (77,000) (74,000) 75,000 (59,000) 15,000 (2,000) 29,000 13,000 42,000 55,000 $