BUAD 286a Chapter 12 P12-7A, P12-11A

Sheet1P12-7A)Kurtzel CompanyP12-11A)Yanik Companya)Statement of Cash FlowsStatement of Cash FlowsYear Ended December 31, 2014Year Ended December 31, 2014Cash Flows From Operating ActivitiesCash Flows From Operating ActivitiesNet Income$32,000Net Income$37,000Changes in Operating AccountsAdjustments to Reconcile Net Income to Net Cash Depreciation Expense$17,500From Operating ActivitiesAccounts Receivable(6,000)Depreciation Expense$42,000Inventory(8,000)Loss on Sale of Equipment2,000Accounts Payable4,000Accounts Receivable8,000Income Taxes Payable(1,000)6,500Inventory(9,450)Net Cash Provided by Operating Activities$38,500Prepaid Expenses5,720Cash Flows From Investing ActivitiesAccounts Payable8,73057,000Cash Receipt From Sale of Asset8,500Net Cash Provided by Operating Activities$94,000Net Cash Provided By Investing Activities8,500Cash Flows From Investing ActivitiesCash Flows From Financing ActivitiesCash Receipt From Sale of Equipment8,000Repayment of Bonds Payable(16,000)Cash Receipt From Sale of Land25,000Cash Dividends Paid(20,000)Purchase of Equipment(92,000)Issuance of Common Stock4,000Net Cash Used by Investing Activities(59,000)Net Cash Used by Financing Activities(32,000)Cash Flows From Financing ActivitiesNet Change in Cash15,000Cash Dividends Paid(12,000)Cash Balance December 31, 201320,000Net Cash Used by Financing Activities(12,000)Cash Balance December 31, 2014$35,000Net Change in Cash23,000Cash Balance December 31, 201345,000b)1)Current Cash Debt Coverage = 38500/((23000+26000)/2)1.5714285714Cash Balance December 31, 2014$68,0002)Cash Debt Coverage38500/((56000+43000)/2)0.77777777783)Free Cash Flow38500-0-2000018500

Chapter 12 P12-7A, P12-11A