Question 4

Rodriquez Corporations comparative balance sheets are presented below.

RODRIQUEZ CORPORATION Comparative Balance Sheets December 31
		2014			2013
Cash		$15,470			$17,490
Accounts receivable		25,220			22,110
Investments		20,090			16,090
Equipment		60,230			70,020
Accumulated depreciationequipment		(14,200	)		(10,410	)
Total		$106,810			$115,300
Accounts payable		$14,580			$11,050
Bonds payable		10,060			30,230
Common stock		49,730			44,640
Retained earnings		32,440			29,380
Total		$106,810			$115,300

Additional information:

1.		Net income was $18,290. Dividends declared and paid were $15,230.
2.		Equipment which cost $9,790 and had accumulated depreciation of $1,140 was sold for $3,390.
3.		All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.

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Prepare a statement of cash flows for 2014 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000).)

RODRIQUEZ CORPORATION Statement of Cash Flows For the Year Ended December 31, 2014
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Depreciation Expense Net Income Issuance of Common Stock Redemption of Bonds Decrease in Inventory Payment of Cash Dividends Decrease in Accounts Payable Increase in Inventory Increase in Accounts Receivable Decrease in Accounts Receivable Increase in Accounts Payable Sale of Land Purchase of Equipment		$
Adjustments to reconcile net income to
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Loss on Disposal of Equipment Retirement of Bonds Payment of Dividends Net Income Decrease in Accounts Receivable Depreciation Expense Increase in Accounts Receivable Decrease in Accounts Payable Increase in Accounts Payable Sale of Equipment Purchase of Investments Issuance of Common Stock	$
Loss on Disposal of Equipment Purchase of Investments Net Income Depreciation Expense Issuance of Common Stock Increase in Accounts Payable Payment of Dividends Increase in Accounts Receivable Sale of Equipment Retirement of Bonds Decrease in Accounts Receivable Decrease in Accounts Payable
Decrease in Accounts Receivable Net Income Decrease in Accounts Payable Increase in Accounts Payable Retirement of Bonds Sale of Equipment Payment of Dividends Depreciation Expense Issuance of Common Stock Purchase of Investments Loss on Disposal of Equipment Increase in Accounts Receivable
Increase in Accounts Payable Sale of Equipment Decrease in Accounts Receivable Purchase of Investments Depreciation Expense Retirement of Bonds Payment of Dividends Decrease in Accounts Payable Loss on Disposal of Equipment Issuance of Common Stock Net Income Increase in Accounts Receivable
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Retirement of Bonds Loss on Disposal of Equipment Payment of Dividends Increase in Accounts Receivable Decrease in Accounts Receivable Decrease in Accounts Payable Sale of Equipment Increase in Accounts Payable Net Income Purchase of Investments Issuance of Common Stock Depreciation Expense
Retirement of Bonds Issuance of Common Stock Net Income Payment of Dividends Increase in Accounts Payable Decrease in Accounts Receivable Increase in Accounts Receivable Decrease in Accounts Payable Depreciation Expense Loss on Disposal of Equipment Sale of Equipment Purchase of Investments
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease in Accounts Receivable Depreciation Expense Increase in Accounts Payable Loss on Disposal of Equipment Retirement of Bonds Sale of Equipment Purchase of Investments Decrease in Accounts Payable Issuance of Common Stock Payment of Dividends Increase in Accounts Receivable Net Income	$
Depreciation Expense Purchase of Investments Retirement of Bonds Increase in Accounts Payable Payment of Dividends Issuance of Common Stock Increase in Accounts Receivable Decrease in Accounts Receivable Net Income Loss on Disposal of Equipment Decrease in Accounts Payable Sale of Equipment
Issuance of Common Stock Retirement of Bonds Increase in Accounts Payable Increase in Accounts Receivable Depreciation Expense Loss on Disposal of Equipment Decrease in Accounts Receivable Purchase of Investments Decrease in Accounts Payable Sale of Equipment Payment of Dividends Net Income
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash		$

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Compute free cash flow.

Free cash flow

$

Question 5

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Zumbrunn Companys income statement contained the condensed information below.

ZUMBRUNN COMPANY Income Statement For the Year Ended December 31, 2014
Service revenue				$971,560
Operating expenses, excluding depreciation		$624,090
Depreciation expense		60,080
Loss on disposal of equipment		16,430		700,600
Income before income taxes				270,960
Income tax expense				40,650
Net income				$230,310

Zumbrunns balance sheet contained the comparative data at December 31, shown below.

		2014		2013
Accounts receivable		$75,170		$59,750
Accounts payable		40,350		28,020
Income taxes payable		11,690		6,580

Accounts payable pertain to operating expenses. Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

ZUMBRUNN COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2014
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash Receipts from Customers For Income Taxes Loss on Disposal of Equipment Net Income Increase in Income Taxes Payable Decrease in Income Taxes Payable Depreciation Expense Increase in Accounts Payable Decrease in Accounts Payable Increase in Accounts Receivable Decrease in Accounts Receivable For Operating Expenses		$
Adjustments to reconcile net income to
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Loss on Disposal of Equipment Cash Receipts from Customers For Income Taxes Decrease in Accounts Payable Increase in Accounts Payable Net Income Increase in Income Taxes Payable Depreciation Expense Decrease in Income Taxes Payable Increase in Accounts Receivable Decrease in Accounts Receivable For Operating Expenses	$
Increase in Income Taxes Payable Decrease in Income Taxes Payable Increase in Accounts Receivable Depreciation Expense Decrease in Accounts Receivable Cash Receipts from Customers For Income Taxes For Operating Expenses Increase in Accounts Payable Net Income Loss on Disposal of Equipment Decrease in Accounts Payable
For Operating Expenses Decrease in Accounts Receivable For Income Taxes Loss on Disposal of Equipment Net Income Depreciation Expense Increase in Accounts Payable Decrease in Accounts Payable Increase in Income Taxes Payable Increase in Accounts Receivable Decrease in Income Taxes Payable Cash Receipts from Customers
Decrease in Accounts Payable Increase in Income Taxes Payable Decrease in Income Taxes Payable Decrease in Accounts Receivable Increase in Accounts Receivable For Income Taxes Net Income Cash Receipts from Customers Depreciation Expense For Operating Expenses Loss on Disposal of Equipment Increase in Accounts Payable
For Income Taxes Net Income Depreciation Expense For Operating Expenses Increase in Accounts Receivable Cash Receipts from Customers Decrease in Accounts Payable Loss on Disposal of Equipment Increase in Accounts Payable Decrease in Accounts Receivable Increase in Income Taxes Payable Decrease in Income Taxes Payable
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash		$