Question

Comparative financial statement data for Carmono Company follow. This Year Last Year AssetS $ 11.50 66.00 112.50 190.00 255.00 52.00 203.00 $393.00 $ 22.00 59.00 100.00 181.00 210.00 39.00 171.00 $352.00 Accounts receivable Inventory Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity 67.50 150.00 175.50 $393.00 $ 54.00 115.00 183.00 $352.00 For this year, the company reported net income as follows Sales Cost of goods sol Gross marqin Selling and administrative expenses Net income $1,250.00 750.00 500.00 480.00 $20.00

Answer 1

Carmmono Company
Statement of Cash Flows
For the year ended December 31, 20xx
Cash flows fro opearting activities:
Net Income		$            20
Adustments to reconcile net income to
net cash provided by operating activities
Add: Depreciation	13		(52-39)
Less: Increase in accounts receivable	(7)		(66-59)
Less: Increase in inventory	(12.50)		(112.5-100)
Add: Increase in accounts payable	13.50		(67.5-54)
		$7
Net cash provided by operating activities		$27
Cash flows from investing activities:
Purchase of Property, plant and building	(45)		(255-210)
Net cash used by investing activities		(45)
Cash flows from financing activities:
Issue of common stock	35		(150-115)
Payments of cash dividend	(27.50)		(183+20-175.5)
Net cash provided by financing activities		7.50
Decrease in cash		(10.50)
Cash at beginning of period		20
Cash at end of period		9.50
Free Cash flow =	Operating cash flow less: Capital Expenditure
	27-45
	$   (18.00)