Question

Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 9.00...

Comparative financial statement data for Carmono Company follow:

This Year Last Year
Assets
Cash $ 9.00 $ 17.00
Accounts receivable 56.00 49.00
Inventory 100.00 87.00
Total current assets 165.00 153.00
Property, plant, and equipment 240.00 200.00
Less accumulated depreciation 48.00 36.00
Net property, plant, and equipment 192.00 164.00
Total assets $ 357.00 $ 317.00
Liabilities and Stockholders’ Equity
Accounts payable $ 60.00 $ 49.00
Common stock 130.00 100.00
Retained earnings 167.00 168.00
Total liabilities and stockholders’ equity $ 357.00 $ 317.00

For this year, the company reported net income as follows:

Sales $ 1,000.00
Cost of goods sold 600.00
Gross margin 400.00
Selling and administrative expenses 380.00
Net income $ 20.00

This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year.

Required:

1. Using the indirect method, prepare a statement of cash flows for this year.

2. Compute Carmono’s free cash flow for this year.

Homework Answers

Answer #1

1. Using the indirect method, prepare a statement of cash flows for this year.

Cash flow from operating activities
Net income 20
Adjustment to reconcile net income to net cash flow from operating activities
Depreciation expense 12
Increase account receivable -7
Increase inventory -13
Increase account payable 11
3
Net cash flow from operating activities 23
Cash flow from investing activities
Purchase Property, plant, and equipment -40
Net cash used in investing activities -40
Cash flow from financing activities
Issue common Stock 30
Dividend paid -21
Net cash flow from financing activities 9
Net cash flow -8
Beginning cash 17
Ending cash 9

Free cash flow = cash flow from operating activities - Purchase Property, plant, and equipment

= 23-40

Free cash flow = -17

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 14.50...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 14.50 $ 28.00 Accounts receivable 78.00 71.00 Inventory 127.50 115.60 Total current assets 220.00 214.60 Property, plant, and equipment 273.00 222.00 Less accumulated depreciation 56.80 42.60 Net property, plant, and equipment 216.20 179.40 Total assets $ 436.20 $ 394.00 Liabilities and Stockholders’ Equity Accounts payable $ 76.50 $ 60.00 Common stock 174.00 133.00 Retained earnings 185.70 201.00 Total liabilities and stockholders’ equity $ 436.20 $...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 12.50...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 12.50 $ 24.00 Accounts receivable 70.00 63.00 Inventory 117.50 105.20 Total current assets 200.00 192.20 Property, plant, and equipment 261.00 214.00 Less accumulated depreciation 53.60 40.20 Net property, plant, and equipment 207.40 173.80 Total assets $ 407.40 $ 366.00 Liabilities and Stockholders’ Equity Accounts payable $ 70.50 $ 56.00 Common stock 158.00 121.00 Retained earnings 178.90 189.00 Total liabilities and stockholders’ equity $ 407.40 $...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 12.00...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 12.00 $ 23.00 Accounts receivable 68.00 61.00 Inventory 115.00 102.60 Total current assets 195.00 186.60 Property, plant, and equipment 258.00 212.00 Less accumulated depreciation 52.80 39.60 Net property, plant, and equipment 205.20 172.40 Total assets $ 400.20 $ 359.00 Liabilities and Stockholders’ Equity Accounts payable $ 69.00 $ 55.00 Common stock 154.00 118.00 Retained earnings 177.20 186.00 Total liabilities and stockholders’ equity $ 400.20 $...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 17.00...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 17.00 $ 33.00 Accounts receivable 88.00 81.00 Inventory 140.00 128.60 Total current assets 245.00 242.60 Property, plant, and equipment 288.00 232.00 Less accumulated depreciation 60.80 45.60 Net property, plant, and equipment 227.20 186.40 Total assets $ 472.20 $ 429.00 Liabilities and Stockholders’ Equity Accounts payable $ 84.00 $ 65.00 Common stock 194.00 148.00 Retained earnings 194.20 216.00 Total liabilities and stockholders’ equity $ 472.20 $...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 13.00...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 13.00 $ 25.00 Accounts receivable 72.00 65.00 Inventory 120.00 107.80 Total current assets 205.00 197.80 Property, plant, and equipment 264.00 216.00 Less accumulated depreciation 54.40 40.80 Net property, plant, and equipment 209.60 175.20 Total assets $ 414.60 $ 373.00 Liabilities and Stockholders’ Equity Accounts payable $ 72.00 $ 57.00 Common stock 162.00 124.00 Retained earnings 180.60 192.00 Total liabilities and stockholders’ equity $ 414.60 $...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 10.00...
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 10.00 $ 19.00 Accounts receivable 60.00 53.00 Inventory 105.00 92.20 Total current assets 175.00 164.20 Property, plant, and equipment 246.00 204.00 Less accumulated depreciation 49.60 37.20 Net property, plant, and equipment 196.40 166.80 Total assets $ 371.40 $ 331.00 Liabilities and Stockholders’ Equity Accounts payable $ 63.00 $ 51.00 Common stock 138.00 106.00 Retained earnings 170.40 174.00 Total liabilities and stockholders’ equity $ 371.40 $...
Exercise 14-6 Prepare a Statement of Cash Flows; Free Cash Flow [LO14-1, LO14-2, LO14-3] Comparative financial...
Exercise 14-6 Prepare a Statement of Cash Flows; Free Cash Flow [LO14-1, LO14-2, LO14-3] Comparative financial statement data for Carmono Company follow: This Year Last Year   Assets   Cash $ 3      $ 6        Accounts receivable 22      24        Inventory 50      40        Total current assets 75      70        Property, plant, and equipment 240      200           Less accumulated depreciation 65      50        Net property, plant, and equipment 175      150        Total assets $ 250...
Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This...
Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash $ 16 $ 12 Accounts receivable 293 230 Inventory 157 195 Prepaid expenses 8 6 Total current assets 474 443 Property, plant, and equipment 513 434 Less accumulated depreciation (83 ) (71 ) Net property, plant, and equipment 430 363 Long-term investments 24 31 Total assets $ 928 $ 837 Liabilities and Stockholders' Equity Accounts payable $ 302 $...
Financial statements of Rukavina Corporation follow: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and...
Financial statements of Rukavina Corporation follow: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 26 $ 23 Accounts receivable 81 74 Inventory 39 33 Property, plant, and equipment 558 500 Less accumulated depreciation 330 301 Total assets $ 374 $ 329 Liabilities and stockholders' equity: Accounts payable $ 44 $ 56 Bonds payable 105 130 Common stock 81 74 Retained earnings 144 69 Total liabilities and stockholders' equity $ 374 $ 329 Income Statement Sales...
Financial statements of Rukavina Corporation follow: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and...
Financial statements of Rukavina Corporation follow: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 57 $ 55 Accounts receivable 81 86 Inventory 62 63 Property, plant, and equipment 526 500 Less accumulated depreciation 263 250 Total assets $ 463 $ 454 Liabilities and stockholders' equity: Accounts payable $ 113 $ 89 Bonds payable 316 360 Common stock 95 94 Retained earnings (61 ) (89 ) Total liabilities and stockholders' equity $ 463 $ 454 Income...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT