Question

Comparative financial statement data for Carmono Company follow This Year Last Year Assets Cash Accounts receivable Inventory Total current assets Property, plant, and equipment $6.50 12.00 39.00 74.00 125.00 198.80 33.00 46.00 87.50 140.00 225.00 44.00 Less accumulated depreciation Net property, plant, and equipment Total assets 181.0 157.e0 $321.00 $282.00 Liabilities and Stockholders' Equity Accounts payable Common stock Retained, earnings Total liabilities and stockholders' equity $321.00 $ 52.50 44.00 110.00 158.50 85.00 153.00 $282.00

Answer 1

1.

Carmono Company
Cash Flow Statement (Indirect Method)
Cash flows from operating activities
Net Income		$   20.00
Adjustments for:
Depreciation expenses	$   11.00
Increase in Accounts Receivable	$   (7.00)
Increase in Inventory	$ (13.50)
Increase in Accounts Payable	$      8.50
		$   (1.00)
Net cash provided by operating activities		$   19.00
Cash flows from investing activities
Cash paid for purchase of property, plant and equipment	$ (35.00)
Net cash used by investing activities		$ (35.00)
Cash flows from financing activities
Cash dividends paid	$ (14.50)
Cash received from issuance of common stock	$   25.00
Net cash provided by financing activities		$   10.50
Net Decrease in cash and cash equivalents		$   (5.50)
Cash and cash equivalents at beginning of period		$   12.00
Cash and cash equivalents at end of period		$      6.50

2.

Net cash provided by operating activities	$   19
Less: Capital expenditure	$ (35)
Less: Dividends paid	$ (15)
Free cash flow	$ (31)

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