1,2,3

G Please complete Exercise as follows: 1. 1) From our textbook Cash Flow from Operating Activities (Indirect Method) The Lincoln Company owns no plant assets and had the following income statement for the year: 4. Sales revenue.. Cost of goods sold. Wages expense. Rent expense.. losurartte expense $800,000 $470,000 120,000 42,000 15,000 10 11 647,000 12 Net income. $153,000 13 14 15 Additional information about the company includes: 16 17 End of Beginning of Year 18 Year 19 Accounts receivable. Inventory. Prepaid insurance Accounts payable. Wages payable. 20 $54,000 $49.000 76.000 7.000 18.000 11.000 21 60.000 8,000 24.000 9,000 22 23 24 25 Use the preceding information to calculate the cash flow frem operating activities using the indirect method 26 27 28 29 Alignment Font pboard Updates for Office are ready to be installed, but first we nee- O UPDATES AVAILABLE 31 H. 5 2) From our textbook Statement of Cash Flows (Indirect Method) Use the following information regarding the Lund Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compure Lund's operating-cash-flow-to-current-liabilities ratio. 38 39 $ 11,000 40 Accounts payable increase Accounts receivable increase.... Accrued liabilities decrease... Amortization expense. Cash balance, January 1 Cash balance, December 31 Cash paid as dividends Cash paid to purchase land. Cash paid to retire bonds payable at par, Cash received from issuance of common stock Cash recerved from sale of equipment Depreciation expense. . Gain on sale of equipment Inventory decrease.. Net income. Prepaid expenses increase Average current liabilities: .... 4,000 3,000 7,000 41 42 ..... 43 22,000 16,000 31,000 44 45 90,000 60,000 35.000 17,000 46 47 48 49 29,000 50 5,000 51 13,000 78.000 3.000 120.000 52 53 54 55 56 57 62 63 3) Cash Flow Ratios Morgan Company reports the following amounts in its annual financial 64 statements: 65 66 Cash flow trom operating activities Cash flow from investing activities. Cash flow from financing activities. Net income. $65.000 (60,000) (8.500) 37,500 $ 52.500 Capital expenditures Average current assets. Average current liabilities Total assets * 67 130,000 68 90,000 69 225,000 70 This amount is a cash outflow 71 72 a Compute Morgan's free cash flow. b. Compute Morgan's operating-cash-flow.to.current-liabilities ratio C. Compute Morgan's operating cash flow-to-capital expendinures ratio. 73 74 75 76 77 78 79