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ACC - Balance sheet accounts for Joyner Company

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Question;Prepare a Statement of Cash Flows (Indirect Method), Free Cash Flow [LO2, LO3, LO4]Balance sheet accounts for Joyner Company contained the following amounts at the end ofYears 1 and 2:BALANCE SHEET ATTACHED AS A FILEThe company?s income statement for Year 2 follows:Sales................... $900,000Cost of goods sold......... 500,000Gross margin............. 400,000Selling and administrativeexpenses.............. 328,000Net operating income....... 72,000Gain on sale of equipment... 8,000Income before taxes........ 80,000Income taxes............. 24,000Net income............... $ 56,000Equipment that had cost $40,000 and on which there was accumulated depreciation of$30,000 was sold during Year 2 for $18,000. Cash dividends totaling $15,000 were declared andpaid during Year 2.Required:1. Using the indirect method, compute the net cash provided by operating activities for Year 2.2. Prepare a statement of cash fl ows for Year 2.3. Compute the free cash fl ow for Year 2.4. Briefl y explain why cash declined so sharply during the year.

 

Paper#39573 | Written in 18-Jul-2015

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