Problem - Prepare a statement of cash flow using the indirect method.
Compare financial statement data as follows:
|
2009
|
2008
|
|
Cash
|
3
|
6
|
|
Accounts receivable
|
22
|
24
|
|
Inventory
|
50
|
40
|
|
Plants and equipment
|
240
|
200
|
|
Less accumulated depreciation
|
-65
|
-50
|
|
Total Depreciations
|
250
|
220
|
In 2009 the company reported net income as follows
|
Sales
|
275
|
|
Cost of Goods sold
|
150
|
|
Gross Margin
|
125
|
|
Selling and administrative expenses
|
90
|
|
Net income
|
35
|
Dividens of 14$ were declared and paid during 2009.
1) Using the indirect method prepare a statement of cash flow for 2009?
2) Compute the free cash flow for 2009.