Problem 12-8A

Presented below are the financial statements of Ivanhoe Company.

Ivanhoe Company Comparative Balance Sheets December 31
Assets		2017			2016
Cash		$ 104,300			$ 59,600
Accounts receivable		59,600			41,720
Inventory		83,440			59,600
Property, plant, and equipment		178,800			232,440
Accumulated depreciation		(95,360	)		(71,520	)
Total		$330,780			$321,840
Liabilities and Stockholders Equity
Accounts payable		$ 56,620			$ 44,700
Income taxes payable		20,860			23,840
Bonds payable		50,660			98,340
Common stock		53,640			41,720
Retained earnings		149,000			113,240
Total		$330,780			$321,840

Ivanhoe Company Income Statement For the Year Ended December 31, 2017
Sales revenue				$721,160
Cost of goods sold				521,500
Gross profit				199,660
Selling expenses		$53,640
Administrative expenses		17,880		71,520
Income from operations				128,140
Interest expense				8,940
Income before income taxes				119,200
Income tax expense				23,840
Net income				$ 95,360

Additional data:

1.		Depreciation expense was $52,150.
2.		Dividends declared and paid were $59,600.
3.		During the year equipment was sold for $25,330 cash. This equipment cost $53,640 originally and had accumulated depreciation of $28,310 at the time of sale.

Further analysis reveals the following.

1.		Accounts payable pertain to merchandise suppliers.
2.		All operating expenses except for depreciation were paid in cash.
3.		All depreciation expense is in the selling expense category.
4.		All sales and purchases are on account.

IE

Prepare a statement of cash flows for Ivanhoe Company using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Compute Free Cash Flow