Rojas Corporation's comparative balance sheets are presented below. ROJAS CORPORATION ...

Question:

Rojas Corporation's comparative balance sheets are presented below.

ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017 2016
Cash $15,000 $10,000
Accounts receivable 21,300 23,400
Land 20,400 25,700
Buildings 70,100 70,100
Accumulated depreciation-buildings (15,000) (10,900)
Total $111,800 $118,300
Accounts payable $12,400 $27,600
Common stock 74,000 73,400
Retained earnings 25,400 17,300
Total $111,800 $118,300

Additional information:

1. Net income was $23,100. Dividends declared and paid were $15,000.

2. No noncash investing and financing activities occurred during 2017.

3. The land was sold for cash of $5,000.

1. Prepare a statement of cash flows for 2017 using the indirect method.

2. Compute free cash flow.

Statement of Cash Flow:

Understanding the statement of cash flow is vital to understanding the financial health of an entity. The statement combines the last two balance sheets and most current income statement to reconcile changes in cash balances over two periods.

Answer and Explanation:


1. Cash flows for 2017 indirect method.


The statement of cash flow includes three sections; operating, investing, and financing activities. The...

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Preparing a Cash Flow Statement by the Indirect Method

from Accounting 301: Applied Managerial Accounting

Chapter 15 / Lesson 3
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