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lear Assets $ 85,000 118,000 272,000 Cash 145,560 229,000 319,000 11,000 704,560 637,000 165,700 471,300 46,000 Accounts receivable Inventory 22,000 497,000 507,000 131,600 375,400 Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets $1,221,860 $872,400 Liabilities and Stockholders' Equity Accounts payable 314,000 45,000 86,000 445,000 200,000 645,000 343,000 233,860 576,860 $265,000 58,000 81,400 Accrued liabilities Income taxes payable 404,400 105,000 Total current liabilities Bonds payable 509,400 273,000 90,000 363,000 Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders ' eguity $1,221,860 $872,400 24

lear Assets $ 85,000 118,000 272,000 Cash 145,560 229,000 319,000 11,000 704,560 637,000 165,700 471,300 46,000 Accounts receivable Inventory 22,000 497,000 507,000 131,600 375,400 Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets $1,221,860 $872,400 Liabilities and Stockholders' Equity Accounts payable 314,000 45,000 86,000 445,000 200,000 645,000 343,000 233,860 576,860 $265,000 58,000 81,400 Accrued liabilities Income taxes payable 404,400 105,000 Total current liabilities Bonds payable 509,400 273,000 90,000 363,000 Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders ' eguity $1,221,860 $872,400 24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Joyner Company's income statement for Year 2 follows (first image):

Its balance sheet amounts at the end of Years 1 and 2 are as follows (second image):

Equipment that had cost $31,100 and on which there was accumulated depreciation of $10,900 was sold during Year 2 for $29,200. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.

Required:
1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2 (Statement of Cash Flows — Indirect Method (partial)).
2. Prepare a statement of cash flows for Year 2.
3. Compute the free cash flow for Year 2.

$710,000 276,000 Sales Cost of goods sold Gross margin 434,000 150,400 Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment 283, 600 9,000 292,600 117,040 Income before taxes Income taxes Net income $175,560
Transcribed Image Text:$710,000 276,000 Sales Cost of goods sold Gross margin 434,000 150,400 Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment 283, 600 9,000 292,600 117,040 Income before taxes Income taxes Net income $175,560
Year 2 Year 1 Assets $ 85,000 118,000 272,000 22,000 497,000 Cash 145,560 229,000 319,000 11,000 Accounts receivable Inventory Prepaid expenses Total current assets 704,560 507,000 131,600 375,400 Property, plant, and equipment 637,000 165,700 Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company 471,300 46,000 Total assets $1,221,860 $872,400 Liabilities and Stockholders' Equity Accounts payable 314,000 45,000 86,000 445,000 200,000 645,000 343,000 $265,000 Accrued liabilities 58,000 81,400 Income taxes payable 404,400 105,000 509,400 Total current liabilities Bonds payable Total liabilities Common stock 273,000 Retained earnings 233,860 90,000 Total stockholders' equity 576,860 363,000 Total liabilities and stockholders' equity $1,221,860 $872,400
Transcribed Image Text:Year 2 Year 1 Assets $ 85,000 118,000 272,000 22,000 497,000 Cash 145,560 229,000 319,000 11,000 Accounts receivable Inventory Prepaid expenses Total current assets 704,560 507,000 131,600 375,400 Property, plant, and equipment 637,000 165,700 Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company 471,300 46,000 Total assets $1,221,860 $872,400 Liabilities and Stockholders' Equity Accounts payable 314,000 45,000 86,000 445,000 200,000 645,000 343,000 $265,000 Accrued liabilities 58,000 81,400 Income taxes payable 404,400 105,000 509,400 Total current liabilities Bonds payable Total liabilities Common stock 273,000 Retained earnings 233,860 90,000 Total stockholders' equity 576,860 363,000 Total liabilities and stockholders' equity $1,221,860 $872,400
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