Newman Corporation's comparative statement of financial position are presented below. Additional information:
1. Net income was $19,300. Dividends declared and paid were $15,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2014 using the indirect method.
(b) Compute free cash flow.

Question

Newman Corporation's comparative statement of financial position are presented below.  Additional information:
1. Net income was $19,300. Dividends declared and paid were $15,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2014 using the indirect method.
(b) Compute free cash flow.

Quizplus · Accepted Answer

The Answer of Newman Corporation's comparative statement of financial position are presented below.  Additional information:
1. Net income was $19,300. Dividends declared and paid were $15,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2014 using the indirect method.
(b) Compute free cash flow.

Newman Corporation's Comparative Statement of Financial Position Are Presented Below