Statement of Cash Flows (Direct Method) The Wolff Company's income statement and comparative balance sheets at December 31 of 2013 and 2012 are shown below: WOLFF COMPANY Income Statement For the Year Ended December 31, 2013 Sales Revenue $825,500 Cost of Goods Sold $559,000 Wages Expense 111,800 Insurance Expense 10,400 Depreciation Expense 22,100 Interest Expense 11,700 Income Tax Expense 37,700 752,700 Net Income $72,800 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash Accounts Receivable $14,300 53,300 117,000 6,500 325,000 (88,400) $427,700 $6,500 41,600 78,000 9,100 253,500 (66,300) $322,400 Inventory Prepaid Insurance Plant Assets Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Wages Payable Income Tax Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Stockholders' Equity $9,100 11,700 9,100 169,000 117,000 111,800 $427,700 $13,000 7,800 10,400 97,500 117,000 76,700 $322,400 Cash dividends of $37,700 were declared and paid during 2013. Plant assets were purchased for cash and bonds payable were issued for cash. Bond interest is paid semi-annually on June 30 and December 31. Accounts payable relate to merchandise purchases. Required a. Calculate the change in cash that occurred during 2013. b. Prepare a statement of cash flows using the indirect method. c. Compute free cash flow. d. Compute the operating-cash-flow-to-current-liabilities ratio. e. Compute the operating-cash-flow-to-capital-expenditures ratio. a. Change in Cash during 2013 $ b. Use a negative sign with cash outflow answers. WOLFF COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash Flow from Operating Activities Cash Received from Customers Cash paid for Merchandise Purchased $ Cash Paid to Employees Cash Paid as Insurance Cash Paid for Interest Cash Paid as Income Taxes Cash Provided by Operating Activities Cash Flow from Investing Activities Purchase of Plant Assets Cash Flow from Financing Activities Issuance of Bonds Payable Payment of Dividends Cash Provided by Financing Activities Net Change in Cash Cash at Beginning of Year Cash at End of Year c. Free cash flow $ d. Operating-cash-flow-to-current-liabilities ratio. Round answer to two decimal places. e. Operating-cash-flow-to-capital-expenditures ratio. Round answer to two decimal places