Newman Corporation's comparative balance sheets are presented below.
Additional information:
1. Net income was $15,300. Dividends declared and paid were $13,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2010 using the indirect method.
(b) Compute free cash flow.

Question

Newman Corporation's comparative balance sheets are presented below.  
Additional information:
1. Net income was $15,300. Dividends declared and paid were $13,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2010 using the indirect method.
(b) Compute free cash flow.

Quizplus · Accepted Answer

The Answer of Newman Corporation's comparative balance sheets are presented below.  
Additional information:
1. Net income was $15,300. Dividends declared and paid were $13,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2010 using the indirect method.
(b) Compute free cash flow.

Newman Corporation's Comparative Balance Sheets Are Presented Below