Ex. 180
Powell Corporation's comparative statement of financial position are presented below.
POWELL CORPORATION
Comparative Statement of Financial Position
December 31
2014 2013
Land€18,000€26,000
Buildings70,00070,000
Accumulated depreciation-buildings (15,000) (10,000)
Accounts receivable 18,200 23,400
Cash 21,570 10,700
Total€112,770€120,100
Share capital-ordinary €75,000€69,000
Retained earnings 25,400 20,000
Accounts payable 12,370 31,100
Total€112,770€120,100
Additional information:
1.Net income was €27,900. Dividends declared and paid were €22,500.
2.All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for €5,900.
Instruction
(a)Prepare a statement of cash flows for 2014 using the indirect method.
(b)Compute free cash flow.