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

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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

 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 \$[removed]

• 9 years ago
Problem 13-7A-Rajesh Company-statement of cash flows
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