1) Change in cash during 2103= Ending cash balance-Beginning cash balance
= $13200-6000= $7200 Increase
2)
WOLFF COMPANY | ||
Statement of Cash Flows | ||
For Year Ended December 31, 2013 | ||
Cash flow from Operating activities | ||
Net income | $67200 | |
Add (deduct) items to convert net income to cash basis | ||
Depreciation | 20400 | |
Accounts receivable (49200-38400) | Increase | -10800 |
Inventory (108000-72000) | Increase | -36000 |
Prepaid insurance (6000-8400) | Decrease | 2400 |
Accounts payable (8400-12000) | Decrease | -3600 |
Wages payable (10800-7200) | Increase | 3600 |
Income tax payable (8400-9600) | Decrease | -1200 |
Cash flow provided by Operating activities | 42000 | |
Cash flow from investing activities | ||
Purchase of plant assets (300000-234000) | -66000 | |
Cash flow from financing activities | ||
Issuance of bonds payable (156000-90000) | 66000 | |
Payment of dividends | -34800 | |
Cash provided by financing activities | $31200 | |
Net change in cash ($42000-66000+31200) | $7200 | |
Cash at beginning of Year | 6000 | |
Cash at end of Year | $13200 | |
3) Capital expenditure= Purchase of plant assets= $66000
Free cash flow= Cash flow provided by operating activities-Capital expenditure
= $42000-66000= $-24000
4) Average current liabilities= ($8400+10800+8400+12000+7200+9600)/2= $28200
Operating-cash-flow-to-current-liabilities ratio= Cash flow from operations/Average current liabilities
= $42000/28200= 1.49
5) Operating-cash-flow-to-capital-expenditures ratio= Cash flow from operations/Capital expenditure
= $42000/66000= 0.64
Statement of Cash Flows (Indirect Method) The Wolff Company's income statement and comparative balance sheets at...
Statement of Cash Flows (Direct Method) The Wolff Company's income statement and comparative balance sheets at December 31 of 2013 and 2012 are shown below: WOLFF COMPANY Income Statement For the Year Ended December 31, 2013 Sales Revenue $825,500 Cost of Goods Sold $559,000 Wages Expense 111,800 Insurance Expense 10,400 Depreciation Expense 22,100 Interest Expense 11,700 Income Tax Expense 37,700 752,700 Net Income $72,800 WOLFF COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash Accounts Receivable $14,300 53,300...
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