Question

The following are the financial statements of Nosker Company NOSKER COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Total 2020 $38,000 32,300 30,800 59,300 (29,700) $130,700 2019 $19,500 19,500 20,900 77,200 (23,900) $113,200 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $28,400 7,100 27,100 18,600 49,500 $130,700 $ 16,300 8,300 33,500 15,000 40,100 $113,200 $241,000 NOSKER COMPANY Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net Income 175,100 65,900 23,400 42,500 2,500 40,000 8,200 $31,800 Additional data: 1. Dividends declared and paid were $22,400. During the year, equipment was sold for $9,200 cash. This equipment cost $17,900 originally and had a book value of $9,200 at the time of sale. 3. All depreciation expense, $14,500, is in the operating expenses. 4. All sales and purchases are on account. Further analysis reveals the following.

Answer 1

Nosker Company
Statement of Cash Flows
For the Year Ended December 31, 2020
Cash Flow from Operating Activities
Net Income		$31800
Non Cash payments:
Depreciation Expense	$14500
Increase in Accounts Receivable ($32300 - $19500)	($12800)
Increase in Inventory ($30800 - $20900)	($9900)
Increase in Accounts Payable ($28400 - $16300)	$12100
Decrease in Income Taxes Payable ($8300 - $7100)	($1200)
		$2700
Net Cash Provided by Operating Activities		$34500
Cash Flow from Investing Activities
Sale of Equipment	$9200
Net Cash Provided by Investing Activities		$9200
Cash Flows from Financing Activities
Payment of Dividends	($22400)
Redemption of Bonds ($33500 - $27100)	($6400)
Issuance of Common Stock ($18600 - $15000)	$3600
Net Cash Used by Financing Activities		($25200)
Net Increase in Cash		$18500
Cash at Beginning of Period		$19500
Cash at End of Period		$38000

Free Cash Flow = Operating Activities – Dividend paid

         = $34500 - $22400 = $12100