Condensed financial data of Inglis Corporation appear below: Additional information:
1. New equipment costing $ 85,000 was purchased for cash in 2021.
2. Old equipment costing $ 25,000 was sold for $ 10,000 cash when carrying amount was $ 13,000.
3. Bonds with a face value of $ 20,000 were converted into $ 20,000 of common shares.
4. A cash dividend of $ 24,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Instructions
a) Prepare a cash flow statement for the year, using the direct method.
b) Calculate free cash flow.

Question

Condensed financial data of Inglis Corporation appear below:  Additional information:
1. New equipment costing $ 85,000 was purchased for cash in 2021.
2. Old equipment costing $ 25,000 was sold for $ 10,000 cash when carrying amount was $ 13,000.
3. Bonds with a face value of $ 20,000 were converted into $ 20,000 of common shares.
4. A cash dividend of $ 24,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Instructions
a) Prepare a cash flow statement for the year, using the direct method.
b) Calculate free cash flow.

Quizplus · Accepted Answer

The Answer of Condensed financial data of Inglis Corporation appear below:  Additional information:
1. New equipment costing $ 85,000 was purchased for cash in 2021.
2. Old equipment costing $ 25,000 was sold for $ 10,000 cash when carrying amount was $ 13,000.
3. Bonds with a face value of $ 20,000 were converted into $ 20,000 of common shares.
4. A cash dividend of $ 24,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Instructions
a) Prepare a cash flow statement for the year, using the direct method.
b) Calculate free cash flow.

Condensed Financial Data of Inglis Corporation Appear Below: Additional