Question

1. Net income was $22.630. Dividends declared and paid were $19,500. 2. No noncash investing and financing activities occurred during 2017 3. The land was sold for cash of $4,900. ODO Instructions (a) Prepare a statement of cash flows for 2017 using the indirect method. (b) Compute free cash flow. statement E17-8 Here are comparative balance sheets for Velo Company Prepare a statement of cash flows-indirect method. (LO2) ick Corp. Prove the cash Balance VELO COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 63,000 41000$ 22,000 Accounts receivable 4 85,000 4000 76,000 Inventory 170,000 19000 189,000 Land 75,000 25000 100,000 Equipment 270,000 70000 200,000 Accumulated depreciation-equipment (66,000) 34,000 (32,000) Total $597,000 $555,000 160,000 230,000 283,000 234,000 Balance 71,000 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total $ 39,000 8000 $ 47,000 4 150,000 SOOO 200,000 216,000 42000 174,000 192,000 $8,000 134,000 Add 93,000 $597,000 $555,000 41,000 69,000 comisared 192,00 ulance 5,000 1,000 3,000 Additional information: 1. Net income for 2017 was $93,000. 2. Cash dividends of $35,000 were declared and paid. 3. Bonds payable amounting to $50,000 were redeemed for cash $50,000, 4. Common stock was issued for $42,000 cash. 5. No equipment was sold during 2017, but land was sold at cost. Instructions Prepare a statement of cash flows for 2017 using the indirect method. ate- was ion E17-9 Rodriquez Corporation's comparative balance sheets are presented below. Prepare statement of cash flows and compute free cash flow. (LO 2,3) RODRIQUEZ CORPORATION Comparative Balance Sheets

Answer 1

   Cash Flow Statement for the Velo Company for the

   Year Ended December 31st 2017

Particulars	Amount	Amount
Net Income for 2017		$93,000
Cash Flow From Operating Activities
Depreciation ( $ 66,000 - $ 32,000)	$ 34,000
Increase in Accounts Receivable ($85,000 - $ 76,000)	( $ 9,000)
Decrease in Inventory ($ 170,000 - $ 189,000)	$19,000
Decrease in Accounts Payable ($ 39,000 - $ 47,000)	($ 8,000)
Net Cash Flow From Operating Activities ( A )		$36,000
Cash Flow From Investing Activities;
Sale of Land ( $ 75,000 - $ 100,000)	$25,000
Purchase of Equipment ($ 270,000 - $ 200,000)	($70,000)
Net Cash Flow From Investing Activities ( B)		($45,000
Cash Flow from Financing Activities;
Redemption of bonds	($ 50,000)
Issue of Common Stock	$42,000
Cash Dividend Paid	($ 35,000)
Net Cash Flow From Financing Activities (C)		($43,000)
Net Increase / Decrease in Cash ( A+B+C)		$41,000
Cash Balance on January 1st 2017		$22,000
Cash Balance on December 31st 2017		$63,000