Question

Excel Assignment #1 - Statement of Cash Flow Spring Semester Northern Illinois Manufacturing prepared the balance sheet and income statement for this year. Now the company needs to prepare its statement of cash flow. The comparative balance sheets for Northern Illinois Manufacturing for this year and last year and the income statement for this year are presented below. (Note: Work in Process is a current asset and should be treated as any other current asset.) Additional information: 1. Northern Illinois Manufacturing sold a piece of company equipment for $24,000. The equipment had been used for ten years. It had cost $80,000 when purchased and had a 10- years life and a $6,000 salvage value. Straight-line depreciation was used. 2. Northern Illinois Manufacturing purchased new equipment costing $209,200. 3. The company paid $50,000 in dividends. Northern Illinois Manufacturing Income Statement For the year ending December 31 $5,536,077 3.132.777 2,403,300 Sales Less: Cost of goods sold Gross Profit Operating expenses: Advertising $50,000 Insurance 400,000 Salaries and wages 584,640 Depreciation 71,319 Other op expenses 21,200 Total operating expenses Income from operations Other income Gain on sale of equip 18,000 Other expenses Interest expense (12.187) Net other income and expenses Income before income tax Income tax expenses Net income 1,127.159 1,276,141 5,813 1,281,954 384.586 $897,368

Prepare a statement of cash flow using the indirect method for this year and determine the free cash flow. I have completed this this but I want to make sure my numbers add up correctly and not just a coincidence.

Answer 1

Cash Flow statement

Cash flow form operating activities
Net incmme		897,368
Adjustment of net income on cash basis
Depreciation	71,319
Gain on sale of equipment	(18,000)
Increase in account Recievable	(138,065)
Increase in work in progress	(702,159)
Increase in inventory	(9,266)
Increase in prepaid expenses	(33,960)
Inceease in account payable	28,735
Increase in income tax payable	21,355
Increase in wages payable	2,533
Increase in interest payable	1,187
Decrease in other current liabilities	(731)
Increase in revolving bank loan payable	15,000	762,052
Net cash provided by operating activities		135,316
Cash flows from investing activities
Equipment sold	24,000
Equipment purchased	(209,200)
Net cash used in investing activities		(185,200)
Cash flows form financing activities
Issuance of notes payable	140,000
Dividends paid	(50,000)
Cash provided form financing activities		90,000
Net increase in cash		40,116
Opening cash balance		746,681
Closing cash balance		786,797

Free cash flow= cash flow from operations- capital expenditures

135,316-185,200

=(49,884)

Answer 2

Northern   Illinois Manufacturing prepared the balance sheet and income statement for   this year. Now the company needs to prepare its statement of cash flow. The   comparative balance sheets for Northern Illinois Manufacturing for this year   and last year and the income statement for this year are presented below.   (Note: Work in Process is a current asset and should be treated as any other   current asset.)
Additional   information:
1.   Northern Illinois Manufacturing sold a piece of company equipment for   $24,000. The equipment had been used for ten years. It had cost $80,000 when   purchased and had a 10-years life and a $6,000 salvage value. Straight-line   depreciation was used.
2.   Northern Illinois Manufacturing purchased new equipment costing $209,200.
3. The   company paid $50,000 in dividends.
Northern Illinois   Manufacturing
Income Statement
For the year ending December   31
Sales		$5,536,077
Less: Cost of goods sold		3,132,777
Gross   Profit		2,403,300
Operating expenses:
Advertising	$50,000
Insurance	400,000
Salaries and wages	584,640
Depreciation	71,319
Other op expenses	21,200
Total operating expenses		1,127,159
Income from operations		1,276,141
Other income
Gain on sale of equip	18,000
Other expenses
Interest expense	-12,187
Net other income and expenses			5,813
Income before income tax			1,281,954
Income tax expenses			384,586
Net   income			$897,368
Northern Illinois   Manufacturing
Balance Sheet
31-Dec
Assets		This Year	Last Year
Current assets
Cash		$786,797	$746,681
Accounts receivable		680,750	542,685
Work in process		702,159	0
Inventory		16,766	7,500
Prepaid expenses		76,550	42,590
Total current assets		2,263,022	1,339,456
Property, plant, and equipment
Furnishings		40,416	40,416
Equipment		929,400	800,200
Buildings		450,000	450,000
Land		300,000	300,000
Accumulated depreciation		-482,523	-485,204
Total property, plant, and   equipment.		1,237,293	1,105,412
Total   Assets		$3,500,315	$2,444,868
Liabilities and Stockholders'   Equity
Current liabilities
Accounts payable		$157,095	$128,360
Income taxes payable		101,344	79,989
Wages payable		4,517	1,984
Interest payable		1,187	0
Other current liabilities		14,515	15,246
Revolving bank loan payable		15,000	0
Total current liabilities		293,658	225,579
Long-term liabilities
Notes payable		140,000	0
Total liabilities		433,658	225,579
Stockholders' equity
Common stock		1,250,000	1,250,000
Retained earnings		1,816,657	969,289
Total stockholders' equity		3,066,657	2,219,289
Total liabilities and   stockholders' equity		$3,500,315	$2,444,868

Cash   flow form operating activities
Net income		897,368
Adjustment of net income on cash basis
Depreciation	71,319
Gain on sale of equipment	-18,000
Increase in account Recievable	-138,065
Increase in work in progress	-702,159
Increase in inventory	-9,266
Increase in prepaid expenses	-33,960
Inceease in account payable	28,735
Increase in income tax payable	21,355
Increase in wages payable	2,533
Increase in interest payable	1,187
Decrease in other current liabilities	-731
Increase in revolving bank   loan payable	15,000	762,052
Net cash provided by   operating activities		135,316
Cash flows from investing   activities
Equipment sold	24,000
Equipment purchased	-209,200
Net cash used in investing   activities		-185,200
Cash flows form financing   activities
Issuance of notes payable	140,000
Dividends paid	-50,000
Cash provided form financing   activities		90,000
Net increase in cash		40,116
Opening cash balance		746,681
Closing cash balance		786,797
Free cash flow= cash flow from   operations- capital expenditures
135,316-185,200
-49,884

Answer 3

Managerial Accting Excel 1.xlsx