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# Prepare a Statement of Cash Flows (Indirect Method)

### Resolved Question:

Prepare a Statement of Cash Flows (Indirect Method); Free Cash Flow [LO2, LO3, LO4] Balance sheet accounts for Joyner Company contained the following amounts at the end of Years 1 and 2:

The company’s income statement for Year 2 follows: Equipment that had cost \$40,000 and on which there was accumulated depreciation of \$30,000 was sold during Year 2 for \$18,000. Cash dividends totaling \$15,000 were declared and paid during Year 2. Sales . . . . . . . . . . . . . . . . . . . \$900,000 Cost of goods sold . . . . . . . . . 500,000 Gross margin . . . . . . . . . . . . . 400,000 Selling and administrative expenses . . . . . . . . . . . . . . 328,000 Net operating income . . . . . . . 72,000 Gain on sale of equipment . . . 8,000 Income before taxes . . . . . . . . 80,000 Income taxes . . . . . . . . . . . . . 24,000 Net income . . . . . . . . . . . . . . . \$ 56,000 Required: 1. Using the indirect method, compute the net cash provided by operating activities for Year 2. 2. Prepare a statement of cash flows for Year 2. 3. Compute the free cash f ow for Year 2. 4. Briefly explain why cash declined so sharply during the year.
Submitted: 5 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 5 years ago.

Hello and welcome to JA

http://www.mediafire.com/?f70t9u670zn8jgi

P.S. If you like my services, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online for a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Please make sure you take the length (and number) of the questions into consideration when making your offer to avoid delays in providing solutions.

Thank you

Customer: replied 5 years ago.
Can you put it in excell format?
Expert:  Manal Elkhoshkhany replied 5 years ago.
I can, but it will take me some time as I am helping a couple of students with timed assignments. Do you have an excel template?
Customer: replied 5 years ago.

No sorry. I just need it by Sunday.

Expert:  Manal Elkhoshkhany replied 5 years ago.

ok, you have posted an excel sheet with the data, can you please upload this sheet to www.mediafire.com then copy and paste the share link here?

Thank you

Expert:  Manal Elkhoshkhany replied 5 years ago.