CASH FLOW STATEMENT USING INDIRECT METHOD
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Muldur Corporation
Comparative Balance Sheets
December 31
2008 2007
Cash 15,200 17,700
Accounts receivable 25,200 22,300
Investments 20,000 16,000
Equipment 60,000 70,000
Accumulated depreciation (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:
1. Net income was 18,300. Dividends declared and paid were 16,400.
2. Equipment which cost 10,000 and had accumulated depreciation of 1,200 was sold for 3,300.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Intructions
a) Prepare a statement of cash flows for 2008 using the indirect method.
b) Compute free cash flow.
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Solution Summary
CASH FLOW STATEMENT FOR THE YEAR 2008 USING INDIRECT METHOD
CASH INFLOWS CASH OUTFLOWS
OPENING BALANCE 17700 DIVIDEND PAID 16400
ISSUE OF COMMON STOCK 5000 BONDS REDEEMED 20000
CASH FROM OPERATIONS 25600 CLOSING BALANCE OF CASH 15200
(NOTE : 1)
sale of equipment 3300
51600 51600
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