Depreciation is $8K (on the bottom) What do you do with goodwill? Please prepare a statement of cash flow that includes the following section EXAMPLE below Operating activities: Net income.................................................. Adjustments to convert net income to cash basis: Depreciation.............................................. Decrease/ increase in accounts receivable................... Increase/decrease in inventory.................................. Decrease/increase in prepaid expenses...................... Decrease/increase in accounts payable...................... Decrease/increase in accrued liabilities....................... Increase/decrease in income taxes payable................. Loss/gain on sale of equipment........................... Gain/loss on sale of investments......................... Net cash provided by operating activities......... Investing activities: Proceeds from sale of long-term investments.... Proceeds from sale of equipment.................... Additions to plant and equipment.................... Net cash used in investing activities................ Financing activities: Issuance of bonds payable............................. Decrease/increse in common stock............................. Cash dividends............................................. Net cash provided by financing activities.......... Free cash flow Net decrease in cash..................................... Cash balance, beginning................................ Cash balance, ending.................................... ? Free cash flow computation: Net cash provided by operating activities..... Capital expenditures.............................. Dividends............................................. Free cash flow......................................... Operating activities: Net income.................................................. Adjustments to convert net income to cash basis: Depreciation.............................................. Decrease/ increase in accounts receivable................... Increase/decrease in inventory.................................. Decrease/increase in prepaid expenses...................... Decrease/increase in accounts payable...................... Decrease/increase in accrued liabilities....................... Increase/decrease in income taxes payable................. Loss/gain on sale of equipment........................... Gain/loss on sale of investments......................... Net cash provided by operating activities......... Investing activities: Proceeds from sale of long-term investments.... Proceeds from sale of equipment.................... Additions to plant and equipment.................... Net cash used in investing activities................ Financing activities: Issuance of bonds payable............................. Decrease/increse in common stock............................. Cash dividends............................................. Net cash provided by financing activities.......... F.

1. Depreciation is $8K (on the bottom)
What do you do with goodwill?
Please prepare a statement of cash flow that includes the following section
EXAMPLE below
Operating activities:
Net income..................................................
Adjustments to convert net income to cash basis:
Depreciation..............................................
Decrease/ increase in accounts receivable...................
Increase/decrease in inventory..................................
Decrease/increase in prepaid expenses......................
Decrease/increase in accounts payable......................
Decrease/increase in accrued liabilities.......................
Increase/decrease in income taxes payable.................
Loss/gain on sale of equipment...........................
Gain/loss on sale of investments.........................
Net cash provided by operating activities.........
Investing activities:
Proceeds from sale of long-term investments....
Proceeds from sale of equipment....................
Additions to plant and equipment....................
Net cash used in investing activities................
Financing activities:
Issuance of bonds payable.............................
Decrease/increse in common stock.............................
Cash dividends.............................................
Net cash provided by financing activities..........
Free cash flow
Net decrease in cash.....................................
Cash balance, beginning................................
Cash balance, ending....................................
?
Free cash flow computation:
Net cash provided by operating activities.....
Capital expenditures..............................

2. Dividends.............................................
Free cash flow.........................................
Operating activities:
Net income..................................................
Adjustments to convert net income to cash basis:
Depreciation..............................................
Decrease/ increase in accounts receivable...................
Increase/decrease in inventory..................................
Decrease/increase in prepaid expenses......................
Decrease/increase in accounts payable......................
Decrease/increase in accrued liabilities.......................
Increase/decrease in income taxes payable.................
Loss/gain on sale of equipment...........................
Gain/loss on sale of investments.........................
Net cash provided by operating activities.........
Investing activities:
Proceeds from sale of long-term investments....
Proceeds from sale of equipment....................
Additions to plant and equipment....................
Net cash used in investing activities................
Financing activities:
Issuance of bonds payable.............................
Decrease/increse in common stock.............................
Cash dividends.............................................
Net cash provided by financing activities..........
Free cash flow
Net decrease in cash.....................................
Cash balance, beginning................................
Cash balance, ending....................................
? 22. Prepare a statement of cash ows for the Blue Company, (2 ny, (20 points) December
31,2014 and 2013 Accounts Receivable Inventory Prepaid Expense $39,000 $21,000 $22,000
$25,000 $25,000 $17,000 Total Current Assets $96,000 $97,000 $75,000 $77,000 $80,000
$64,000 Less: Accumulated Depreciation Total Assets 133.000 $113.000 Accounts Payable
Accrued $8,000 15.000 $10,000 $24,000 $20,000$23,000 Total Current Liabilities Bonds
Payable Total Liabilities Stockholders Equity $44,000 $38,000 Common Stock Retained

3. Earnings $20,000 129.000 000 sias,000 13.000 $30,000 359.000$55.009 189.000 sooo Total
Stockholders Equity Total Liabilities & Stockholders' Equity Additional information: 1. 2014
net income was $35,000 2. Equipment was sold for $5,000 that cost $15,000 and had
accumulated depreciation of $8,000 Investing Net Lncoe Depréciation 0 35.600
Solution
**Depreciation = 64000-8000-75000 = 19000 + 5000 for goodwill amortization = 24000
2)Free cash flow
Cash provided by operating activity = 57000
Dividend - 31000
capital expenditure -32000
free cash flow -6000cash flow from operating activityNet IncomeAdjustment to reconcile net
income to cash IncomeDepreciation **24000Decrease in Accounts receivable4000Increase in
Inventory-5000Increase in prepaid expense-4000Increase in accounts payable2000Decrease in
accrued liability-1000loss on sale of equipment [5000- (15000- 8000) ]2000cash flow provided
by operating activity57000cash flow from Investing activitysale of equipment 5000Purchase of
equipment [80000- 15000 - 97000)- 32000Net cash provided by investing activity-27000cash
flow from financing activityissue of common stock10000dividend paid [ 55000+ 35000-59000]-
31000issue of bond5000cash flow from financing activity-16000Net Increase or decrease in
cash (57000- 27000-16000)14000Add:Beginning cash balance25000Balance at end39000