Question
The comparative balance sheets for Beckwith Products Company are presented below. Beckwith Products Comparative Balance Sheets For the Years Ended December 31, 2018 and 2019
The comparative balance sheets for Beckwith Products Company are presented below.
| Beckwith Products |
| Comparative Balance Sheets |
| For the Years Ended December 31, 2018 and 2019 |
| 1 |
| 2019 | 2018 |
| 2 | Assets: |
|
|
| 3 | Cash | $36,950.00 | $25,000.00 |
| 4 | Accounts receivable | 75,100.00 | 78,000.00 |
| 5 | Inventory | 45,300.00 | 36,000.00 |
| 6 | Property, plant, and equipment | 256,400.00 | 153,000.00 |
| 7 | Accumulated depreciation | 38,650.00 | 20,000.00 |
| 8 | Total assets | $375,100.00 | $272,000.00 |
| 9 | Liabilities and equity: |
|
|
| 10 | Accounts payable | $13,100.00 | $11,000.00 |
| 11 | Interest payable | 11,500.00 | 8,000.00 |
| 12 | Wages payable | 8,100.00 | 9,000.00 |
| 13 | Notes payable | 105,000.00 | 90,000.00 |
| 14 | Common stock | 100,000.00 | 50,000.00 |
| 15 | Retained earnings | 137,400.00 | 104,000.00 |
| 16 | Total liabilities and equity | $375,100.00 | $272,000.00 |
Additional Information:
| 1. | Net income for 2019 was $58,400. |
| 2. | Cash dividends of $25,000 were declared and paid during 2019. |
| 3. | During 2019, 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 for 2019. |
| 2. | Compute the following cash-based performance measures: (a) free cash flow and (b) cash flow adequacy. (Note: Assume that the average amount of debt maturing over the next 5 years is $85,000. |
Labels and Amount Descriptions
| Labels | |
| Cash flows from operating activities | |
| Cash flows from investing activities | |
| Cash flows from financing activities | |
| December 31, 2019 | |
| For the year ended December 31, 2019 | |
| Amount Descriptions | |
| Cash, 1/1/2019 | |
| Cash, 12/31/2019 | |
| Cash received from issuance of notes | |
| Cash received from stock issue | |
| Depreciation expense | |
| Decrease in accounts receivable | |
| Decrease in inventory | |
| Decrease in wages payable | |
| Equipment purchase | |
| Increase in accounts payable | |
| Increase in accounts receivable | |
| Increase in inventory | |
| Increase in interest payable | |
| Increase in wages payable | |
| Net cash provided by financing activities | |
| Net cash used for financing activities | |
| Net cash provided by investing activities | |
| Net cash used for investing activities | |
| Net cash provided by operating activities | |
| Net cash used for operating activities | |
| Net decrease in cash | |
| Net increase in cash | |
| Net income | |
| Net loss | |
| Payment of dividends | |
| Repayment of long-term liabilities |
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Fundamentals Of Business Mathematics In Canada
Authors: F. Ernest Jerome, Jackie Shemko
3rd Edition
1259370151, 978-1259370151
