Problem 12-7A Presented below are the financial statements of Kingbird Company. Kingbird Company Comparative Balance Sheets…
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Question “Problem 12-7A Presented below are the financial statements of Kingbird Company. Kingbird Company Comparative Balance Sheets…”
Problem 12-7A Presented below are the financial statements of Kingbird Company. Kingbird Company Comparative Balance Sheets December 31 2017 Assets 2016 89,600 51,200 Cash 51,200 Accounts receivable 35,840 71,680 51,200 Inventory 199,680 Property, plant, and equipment 153,600 (81,920) (61,440) Accumulated depreciation $284,160 $276,480 Tota Liabilities and Stockholders’ Equity 48,640 38,400 Accounts payable Income taxes payable 20,480 17,920 Bonds payable 43,520 84,480 Common stock 46,080 35,840 Retained earnings 97,280 128,000 $284,160 $276,480 Tota
Answer
Kingbird Company
Cash Flow Statement (Indirect Method).
The year ended December 31, 2017.
Cash flows from operations
Net Income
$ 81,920
Adjustments to account for non-cash effects
Depreciation
$ 44,800
Variations in operating assets and liabilities
Accumulations receivables increase
$ -15,360
Stock Increase
$ -20,480
Increase in Accounts Receivable
$ 10,240
Reduced income tax payable
$ -2,560
$ 16,640
Operation Cash Generated
$ 98,560
Cash flows from investments
Equipment sales generate proceeds
$ 21,760
Investing activities generate net cash
$ 21,760
Cash flows from financing activities
Redeem bonds
$ -40,960
Dividends paid
$ -51,200
Common stock issue
$ 10,240
Financing activities require net cash
$ -81,920
Increase in cash and cash equivalents net
$ 38,400
Cash and cash equivalents in the beginning of the period
$ 51,200
End of the period cash and cash equivalents
$ 89,600
Cashflow = Free cashflow minus capital expenditure
Cashflow free = $98,560 to $51,200
Cashflow free = $47,360
Conclusion
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