UOP ACC 291 Week 5 Exercise E12 .pdf
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UOP ACC 291 Week 5 Exercise E12-3, E12-10 NEW
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Prepare the operating activities section—indirect method.
E12-3 Sosa Company reported net income of $190,000 for 2017.
Sosa also reported depreciation expense of $35,000 and a loss
of $5,000 on the disposal of plant assets. The comparative
balance sheets show an increase in accounts receivable of
$15,000 for the year, a $17,000 increase in accounts payable,
and a $4,000 increase in prepaid expenses.
Prepare the operating activities section of the statement of cash
flows for 2017. Use the indirect method.
Compare free cash flow of two companies.
E12-10 Information for two companies in the same industry,
Merrill Corporation and Wingate Corporation, is presented
Merrill Corporation Wingate Corporation
Net cash provided by operating activities $ 80,000 $100,000
Average current liabilities 50,000 100,000
Net income 200,000 200,000
Capital expenditures 40,000 70,000
Dividends paid 5,000 10,000
Compute free cash flow for both companies and compare.