Planner Corporation's comparative balance sheets are presented below. PLANNER CORPORATION Comparative Balance Sheets December 31 2017 2016 Cash $ 21 , 570 $ 10 , 700 Accounts receivable 18 , 200 23 , 400 Land 18 , 000 26 , 000 Building 70 , 000 70 , 000 Accumulated depreciation ( 15 , 000 ) ‾ ( 10 , 000 ) ‾ Total $ 112 , 770 ‾ $ 120 , 100 ‾ Accounts payable $ 12 , 370 $ 31 , 100 Common stock 75 , 000 69 , 000 Retained earnings 25 , 400 ‾ 20 , 000 ‾ Total $ 112 , 770 ‾ ‾ 120 , 100 ‾ ‾ \begin{array}{c} ext { PLANNER CORPORATION }\ ext { Comparative Balance Sheets }\ ext { December 31}\\begin{array}{lrr} & 2017 & 2016\ ext { Cash } & \$ 21,570 & \$ 10,700 \ ext { Accounts receivable } & 18,200 & 23,400 \ ext { Land } & 18,000 & 26,000 \ ext { Building } & 70,000 & 70,000 \ ext { Accumulated depreciation } & \underline{(15,000)} & \underline{(10,000)} \\quad ext { Total } & \underline{\$ 112,770} & \underline{\$ 120,100} \\ ext { Accounts payable } & \$ 12,370 & \$ 31,100 \ ext { Common stock } & 75,000 & 69,000 \ ext { Retained earnings } & \underline{25,400} & \underline{20,000} \\quad ext { Total } & \underline{\underline{\$ 112,770}} & \underline{\underline{120, 100}}\end{array}\end{array} PLANNER CORPORATION Comparative Balance Sheets December 31 Cash Accounts receivable Land Building Accumulated depreciation Total Accounts payable Common stock Retained earnings Total 2017 $21 , 570 18 , 200 18 , 000 70 , 000 ( 15 , 000 ) $112 , 770 $12 , 370 75 , 000 25 , 400 $112 , 770 2016 $10 , 700 23 , 400 26 , 000 70 , 000 ( 10 , 000 ) $120 , 100 $31 , 100 69 , 000 20 , 000 120 , 100 Additional information:1. Net income was $27900. Dividends declared and paid were $22500.2. 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 $5900.Instruction(a) Prepare a statement of cash flows for 2017 using the indirect method.(b) Compute free cash flow.

Question

Planner Corporation's comparative balance sheets are presented below.    PLANNER CORPORATION   Comparative Balance Sheets   December 31 2017 2016  Cash  $ 21 , 570 $ 10 , 700  Accounts receivable  18 , 200 23 , 400  Land  18 , 000 26 , 000  Building  70 , 000 70 , 000  Accumulated depreciation  ( 15 , 000 ) ‾ ( 10 , 000 ) ‾  Total  $ 112 , 770 ‾ $ 120 , 100 ‾  Accounts payable  $ 12 , 370 $ 31 , 100  Common stock  75 , 000 69 , 000  Retained earnings  25 , 400 ‾ 20 , 000 ‾  Total  $ 112 , 770 ‾ ‾ 120 , 100 ‾ ‾ \begin{array}{c}	ext { PLANNER CORPORATION }\	ext { Comparative Balance Sheets }\	ext { December 31}\\begin{array}{lrr} & 2017 & 2016\	ext { Cash }  &  \$ 21,570  &  \$ 10,700 \	ext { Accounts receivable }  &  18,200  &  23,400 \	ext { Land }  &  18,000  &  26,000 \	ext { Building }  &  70,000  &  70,000 \	ext { Accumulated depreciation }  &  \underline{(15,000)}  &  \underline{(10,000)} \\quad 	ext { Total }  &  \underline{\$ 112,770}  &  \underline{\$ 120,100} \\	ext { Accounts payable }  &  \$ 12,370  &  \$ 31,100 \	ext { Common stock }  &  75,000  &  69,000 \	ext { Retained earnings }  &  \underline{25,400}  &  \underline{20,000} \\quad 	ext { Total }  &  \underline{\underline{\$ 112,770}}  &  \underline{\underline{120, 100}}\end{array}\end{array}  PLANNER CORPORATION   Comparative Balance Sheets   December 31  Cash   Accounts receivable   Land   Building   Accumulated depreciation   Total   Accounts payable   Common stock   Retained earnings   Total  ​ 2017 $21 , 570 18 , 200 18 , 000 70 , 000 ( 15 , 000 ) ​ $112 , 770 ​ $12 , 370 75 , 000 25 , 400 ​ $112 , 770 ​ ​ ​ 2016 $10 , 700 23 , 400 26 , 000 70 , 000 ( 10 , 000 ) ​ $120 , 100 ​ $31 , 100 69 , 000 20 , 000 ​ 120 , 100 ​ ​ ​ ​   Additional information:1. Net income was $27900. Dividends declared and paid were $22500.2. 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 $5900.Instruction(a) Prepare a statement of cash flows for 2017 using the indirect method.(b) Compute free cash flow.

Laura Gawart · Accepted Answer

Final Answer : (a)

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