Preparing the Statement of Cash Flows

Balance sheet information for Beckwith Products Company is presented below.

	Jan. 1		Dec. 31
Assets:
Cash	$25,000		$36,950
Accounts receivable	78,000		75,100
Inventory	36,000		45,300
Property, plant, and equipment	153,000		256,400
Accumulated depreciation	20,000		38,650
Total assets	$272,000		$375,100
Liabilities and Equity:
Accounts payable	$11,000		$13,100
Interest payable	8,000		11,500
Wages payable	9,000		8,100
Notes payable	90,000		105,000
Common stock	50,000		100,000
Retained earnings	104,000		137,400
Total liabilities and equity	$272,000		$375,100

Additional Information:

1. Net income for the year was $58,400.
2. Cash dividends of $25,000 were declared and paid during the year.
3. During the year, Beckwith issued $50,000 of notes payable and repaid $35,000 principal relating to notes payable.
4. Common stock was issued for $50,000 cash.
5. Depreciation expense was $18,650, and there were no disposals of equipment.

Required:

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

Beckwith Products Company Statement of Cash Flows For the year ending December 31

Cash flows from operating activities:
Cash received from stock issueDecrease in accounts payableNet incomeNet increase (decrease) in cashRepayment of long-term liabilitiesNet income
Adjustments to reconcile net income to net cash flow from operating activities:
Cash received from issuance of notesCash received from stock issue Depreciation expense Net increase (decrease) in cash Repayment of long-term liabilitiesDepreciation expense
Cash received from issuance of notesCash received from stock issue Decrease in accounts receivable Net increase (decrease) in cash Repayment of long-term liabilities Decrease in accounts receivable
Cash received from stock issue Increase in inventory Net income Payment of dividends Repayment of long-term liabilities Increase in inventory
Accumulated depreciationDecrease in interest payableIncrease in accounts payable Payment of dividends Repayment of long-term liabilities Increase in accounts payable
Cash received from stock issue Increase in interest payable Payment of dividends Receipts of dividends Repayment of long-term liabilities Increase in interest payable
Cash received from issuance of notesCash received from stock issue Decrease in wages payable Payment of dividends Repayment of long-term liabilities Decrease in wages payable
Net cash provided by financing activities Net cash provided by investing activities Net cash provided by operating activities Net cash used for investing activities Net cash used for operating activities Net cash provided by operating activities
Cash flows from investing activities:
Decrease in wages payableDepreciation expense Equipment purchase Increase in interest payableIncrease in inventory Equipment purchase
Net cash provided by financing activities Net cash provided by investing activities Net cash provided by operating activities Net cash used for investing activities Net cash used for operating activities Net cash used for investing activities
Cash flows from financing activities:
Cash received from issuance of notes decrease in wages payableDepreciation expense increase in accounts payable increase in interest payable cash received from issuance of notes
Decrease in accounts receivable decrease in wages payableIncrease in accounts payable increase in interest payableRepayment of long-term liabilities repayment of long-term liabilities
Cash received from stock issueDepreciation expenseIncrease in accounts payableIncrease in interest payableIncrease in inventoryCash received from stock issue
Accumulated depreciationDecrease in accounts receivableDepreciation expenseIncrease in accounts payablePayment of dividendsPayment of dividends
Net cash provided by financing activities
Decrease in accounts receivable decreased in wages payableDepreciation expense increase in accounts payableNet increase (decrease) in cash net increase (decrease) in cash
Cash, January 1
Cash, Dec. 31

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.)

Round ratio to two decimal places. Enter negative values as negative numbers.

Free cash flow
Adequacy ratio

Note:

When filling the choices in the statement, please fill each name according to the choices.