Foxboro Company%u2019s income statement for Year 2 follows:
Foxboro Company
Income Statement
Sales $ 710,000
Cost of goods sold 234,000
Gross margin 476,000
Selling and administrative expenses 218,000
Net operating income 258,000
Gain on sale of equipment 10,000
Income before taxes 268,000
Income taxes 80,400
Net income $ 187,600
Its balance sheet amounts at the end of Years 1 and 2 are asfollows:
Foxboro Company
Balance Sheet
Year 2 Year 1
Assets
Cash $ 143,900 $ 106,100
Accounts receivable 269,000 119,000
Inventory 318,000 270,000
Prepaid expenses 9,500 19,000
Total current assets 740,400 514,100
Plant and equipment 622,000 517,000
Accumulated depreciation 166,300 131,600
Net plant and equipment 455,700 385,400
Loan to Harker Company 47,000 0
Total assets
$ 1,243,100 $ 899,500
Liabilities and Stockholders' Equity
Accounts payable $ 310,000 $ 260,000
Accrued liabilities 46,000 59,000
Income taxes payable 85,900 80,500
Total current liabilities 441,900 399,500
Bonds payable 207,000 119,000
Total liabilities 648,900 518,500
Common stock 345,000 286,000
Retained earnings 249,200 95,000
Total stockholders' equity 594,200 381,000
Total liabilities and stockholders' equity $ 1,243,100 $ 899,500
Equipment that had cost $31,600 and on which there wasaccumulated depreciation of $11,000 was sold during Year 2 for$30,600. The company declared and paid a cash dividend during Year2. It did not retire any bonds or repurchase any of its ownstock.
Required:
1.
Using the indirect method, compute the net cash for operatingactivities for Year 2. (Negative amount should be indicated by aminus sign. Omit the "$" sign in your response.)
Net cash operating activities $
2.
Prepare a statement of cash flows for Year 2. (Amounts to bededucted should be indicated with a minus sign. Omit the "$" signin your response.)
Foxboro Company
Statement of Cash Flows
Operating activities:
$
Adjustments to convert net income to cash basis:
$
Net cash operating activities
Investing activities:
Net cash investing activities
Financing activities:
Net cash financing activities
Cash balance, beginning of year
Cash balance, end of year $
3.
Compute the free cash flow for Year 2.(Negative amount should beindicated by a minus sign. Omit the "$" sign in your response.)
Free cash flow $
Foxboro Company%u2019s income statement for Year 2 follows:
Foxboro Company
Income Statement
Sales $ 710,000
Cost of goods sold 234,000
Gross margin 476,000
Selling and administrative expenses 218,000
Net operating income 258,000
Gain on sale of equipment 10,000
Income before taxes 268,000
Income taxes 80,400
Net income $ 187,600
Its balance sheet amounts at the end of Years 1 and 2 are asfollows:
Foxboro Company
Balance Sheet
Year 2 Year 1
Assets
Cash $ 143,900 $ 106,100
Accounts receivable 269,000 119,000
Inventory 318,000 270,000
Prepaid expenses 9,500 19,000
Total current assets 740,400 514,100
Plant and equipment 622,000 517,000
Accumulated depreciation 166,300 131,600
Net plant and equipment 455,700 385,400
Loan to Harker Company 47,000 0
Total assets
$ 1,243,100 $ 899,500
Liabilities and Stockholders' Equity
Accounts payable $ 310,000 $ 260,000
Accrued liabilities 46,000 59,000
Income taxes payable 85,900 80,500
Total current liabilities 441,900 399,500
Bonds payable 207,000 119,000
Total liabilities 648,900 518,500
Common stock 345,000 286,000
Retained earnings 249,200 95,000
Total stockholders' equity 594,200 381,000
Total liabilities and stockholders' equity $ 1,243,100 $ 899,500
Equipment that had cost $31,600 and on which there wasaccumulated depreciation of $11,000 was sold during Year 2 for$30,600. The company declared and paid a cash dividend during Year2. It did not retire any bonds or repurchase any of its ownstock.
Required:
1.
Using the indirect method, compute the net cash for operatingactivities for Year 2. (Negative amount should be indicated by aminus sign. Omit the "$" sign in your response.)
Net cash operating activities $
2.
Prepare a statement of cash flows for Year 2. (Amounts to bededucted should be indicated with a minus sign. Omit the "$" signin your response.)
Foxboro Company
Statement of Cash Flows
Operating activities:
$
Adjustments to convert net income to cash basis:
$
Net cash operating activities
Investing activities:
Net cash investing activities
Financing activities:
Net cash financing activities
Cash balance, beginning of year
Cash balance, end of year $
3.
Compute the free cash flow for Year 2.(Negative amount should beindicated by a minus sign. Omit the "$" sign in your response.)
Free cash flow $
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