Problem 13-7A-Rajesh Company-statement of cash flows

Problem 13-7A

Presented below are the financial statements of Rajesh Company.

Rajesh Company Comparative Balance Sheets December 31
Assets	2014		2013
Cash	$36,880		$19,710
Accounts receivable	32,050		19,660
Inventory	29,110		20,140
Equipment	59,660		77,250
Accumulated depreciation—equipment	(29,580	)	(23,440	)
Total	$128,120		$113,320

Liabilities and Stockholders’ Equity
Accounts payable	$28,290		$ 16,200
Income taxes payable	7,150		8,140
Bonds payable	27,430		32,330
Common stock	18,660		14,420
Retained earnings	46,590		42,230
Total	$128,120		$113,320

Rajesh Company Income Statement For the Year Ended December 31, 2014
Sales revenue		$241,690
Cost of goods sold		176,700
Gross profit		64,990
Operating expenses		23,870
Income from operations		41,120
Interest expense		3,180
Income before income taxes		37,940
Income tax expense		8,920
Net income		$29,020

Additional data:

1.		Depreciation expense is 14,010.
2.		Dividends declared and paid were $24,660.
3.		During the year equipment was sold for $9,720 cash. This equipment cost $17,590 originally and had accumulated depreciation of $7,870 at the time of sale.

(a) Prepare a statement of cash flows using the indirect method.

(b) Compute free cash flow.

Free cash flow

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Problem 13-7A-Rajesh Company-statement of cash flows

NOT RATED

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