Newman Corporation's Comparative Balance Sheets Are Presented Below

question 114

Essay

Newman Corporation's comparative balance sheets are presented below.
Additional information:
1. Net income was $15,300. Dividends declared and paid were $13,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2010 using the indirect method.
(b) Compute free cash flow.

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Definitions:

Windward Side

The side of a mountain, island, or other land mass that faces the direction from which the wind is coming, often receiving more rainfall than the leeward side.

El Niño-Southern Oscillation

A climate phenomenon characterized by the periodic warming of sea surface temperatures in the central and eastern Pacific Ocean, affecting weather patterns globally.

Prevailing Easterly Winds

Winds that typically blow from the east, common in tropical regions close to the equator due to the Earth's rotation and atmospheric conditions.

Upwellings

The rising of deep, cold, and nutrient-rich water to the surface, fostering significant biological productivity.