Question: joyner companys income statement for year 2 follows sales ...
Joyner Company’s income statement for Year 2 follows:
|Cost of goods sold||358,000|
|Selling and administrative expenses||217,000|
|Net operating income||139,000|
|Gain on sale of equipment||7,000|
|Income before taxes||146,000|
Its balance sheet amounts at the end of Years 1 and 2 are as follows:
|Year 2||Year 1|
|Cash and cash equivalents||$||47,400||$||110,600|
|Total current assets||634,900||518,600|
|Property, plant, and equipment||628,000||507,000|
|Less accumulated depreciation||166,200||131,700|
|Net property, plant, and equipment||461,800||375,300|
|Loan to Hymans Company||44,000||0|
|Liabilities and Stockholders' Equity|
|Income taxes payable||85,900||80,900|
|Total current liabilities||453,900||406,900|
|Total stockholders' equity||484,800||379,000|
|Total liabilities and stockholders' equity||$||1,140,700||$||893,900|
Equipment that had cost $31,700 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $27,600. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.
1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2.
2. Prepare a statement of cash flows for Year 2.
3. Compute the free cash flow for Year 2.