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Statement of Cash Flows (Indirect Method) The Wolff Company's income statement and comparative balance sheets at December 31 of 2016 and 2015 are shown below:
Statement of Cash Flows (Indirect Method) The Wolff Company's income statement and comparative balance sheets at December 31 of 2016 and 2015 are shown below: ce WOLFF COMPANY Income Statement For the Year Ended December 31, 2016 Sales Revenue $645,000 Cost of Goods Sold $430,000 Wages Expense 86,000 Insurance Expense 12,000 Depreciation Expense 13,000 Interest Expense 12,000 Income Tax Expense 29,000 582,000 Net Income $63,000 Required a. Calculate the change in cash that occurred during 2016, 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 2016 $ b. Use a negative sign with cash outflow answers. WOLFF COMPANY Statement of Cash Flows For Year Ended December 31, 2016 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Accounts Receivable Inventory Prepaid Insurance Accounts Payable Wages Payable Income Tax Payable Cash Flow 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. 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
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