prepare a statement of cash flows for 2014 using the indirect method 621055
Rodriquez Corporation”s comparative balance sheets are presented below.
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RODRIQUEZ CORPORATION Comparative Balance Sheets December 31 |
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|
2014 |
2013 |
|
|
Cash |
$ 15,200 |
$ 17,700 |
|
Accounts receivable |
25,200 |
22,300 |
|
Investments |
20,000 |
16,000 |
|
Equipment |
60,000 |
70,000 |
|
Accumulated depreciation—equipment |
(14,000) |
(10,000) |
|
Total |
$106,400 |
$116,000 |
|
Accounts payable |
$ 14,600 |
$ 11,100 |
|
Bonds payable |
10,000 |
30,000 |
|
Common stock |
50,000 |
45,000 |
|
Retained earnings |
31,800 |
29,900 |
|
Total |
$106,400 |
$116,000 |
Additional information:
- Net income was $18,300. Dividends declared and paid were $16,400.
- Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $3,300.
- All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instructions
(a)Prepare a statement of cash flows for 2014 using the indirect method.
(b)Compute free cash flow.