Managerial Accounting: E13-7 Willingham Corporation's comparative balance sheets

Managerial Accounting
E13-7
Willingham Corporation's comparative balance sheets are presented below.
WILLINGHAM CORPORATION
Comparative Balance Sheets
December 31
2011 2010
Cash 14,300 10,700
Accounts receivable 21,200 23,400
Land 20,000 26,000
Building 70,000 70,000
Accumulated depreciation (15,000) (10,000)
Total 110,500 120,100

Accounts payable 12,370 31,100
Common stock 75,000 69,000
Retained earnings 23,130 20,000
Total 110,500 120,100
Additional information:
1. Net income was 22,630. Dividends declared and paid were 19,500.
2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for 4,900.

Required:
a. Prepare a statement of cash flows for 2011 using the indirect method.
(List multiple entries with a positive cash flow first and then the negative cash flow. List amounts from largest to smallest eg 10, 5, 3, 2. If amount decreases cash flow, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
b. Compute free cash flow. (If amount decreases cash flow, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
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