Exercise 11-47 (Algorithmic) Preparing the Statement of Cash Flows The comparative balance sheets for Beckwith Products Company are presented below. 2019 2018 Assets: Cash $36,950 $ 25,000 Accounts receivable 75,100 78,000 Inventory 45,300 36,000 Property, plant, and equipment 256,400 153,000 Accumulated depreciation 38,650 20,000 Total assets $375,100 $ 272,000 Liabilities and Equity: Accounts payable $ 13,100 $ 11,000 Interest payable 11,500 8,000 Wages payable 8,100 9,000 Notes payable 106,100 90,000 Common stock 88,400 50,000 Retained earnings 147,900 104,000 Total liabilities and equity $375,100 $ 272,000 Additional Information: 1. Net income for 2019 was $58,400. 2. Cash dividends of $14,500 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 $38,400 cash. 5. Depreciation expense was $19,750, and there were no disposals of equipment. Required: 1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2019. Use a minus sign to indicate any decreases in cash or cas outflows. Beckwith Products Company Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from operating activities: Net income 58,400 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense Decrease in accounts receivable Increase in inventory Increase in accounts payable Increase in interest payable Decrease in wages payable Net rach nrmided hy oneration activities 19,750 2,900 9.300 2,100 3,500 -900 16,950 X 75.350 x Decrease in accounts receivable Increase in inventory Increase in accounts payable Increase in interest payable BV Decrease in wages payable Net cash provided by operating activities Cash flows from investing activities: Equipment purchase Net cash used for investing activities Cash flows from financing activities: Cash received from issuance notes Repayment of long-term liabilities Cash received from stock issue Payment of dividends Net cash provided by financing activities Net change in cash Cash, 1/1/2019 Cash, 12/31/2019 2,900 -9,300 2,100 3,500 -900 16,950 X -103,400 0000 50,000 35,000 38,400 -14,500 X 75,350 X -103,400 38,500 X 11.950 25,000 36,950 K 2. Compute the following cash-based performance measures: a. Free cash flow b. Cash flow adequacy (Note: Assume that the average amount of debt maturing over the next 5 years is $85,000). Use two decimal places for the adequacy ratio. Enter negative values as negative numbers. Free cash flow -27,450 X 0.48 X Adequacy ratio Feedback Y Check My Work 2. Free cash flow represents the cash flow that a company is able to generate after considering capital expenditures and cash dividend Cash flow adequacy ratio provides a measure of the company's ability to meet its maturing debt obligations with its operating cash flow Feedback