WILLINGHAM CORPORATION Comparative Balance Sheet December 3 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. 2. All other changes in noncurrent account balances had a direct effect on cash flow, except the change in accumulated depreciation. The land was sold for $4,900. a). Prepare a statement of cash flow for 2011 using the direct method. b). Compute free cash flow.

An analysis of comparative balance sheets, the current year s income statement, and the general ledger accounts of Conard Corp. uncovered the following items . Assume all items involve cash unless there is information to the contrary. (a). Payment of interest on notes payable (h). Issuance of capital stock. (b). Exchange of land for patent. (i). Amortization of patent (c). Sale of building at book value (j). Issuance of bonds for land. (d). Payment of dividends. (k). Purchase of Land. (e). Depreciation. (l). Conversation of bonds into common stock. (f). Receipt of dividends on investment in stock. (m). Loss on sale of land. (g). Receipt of interest on notes receivable. (n). Retirement of bonds. Indicate how each item should be classified in thee statement of cash flows using these four major classifications: operation activity ( indirect method), investing activity, financing activity, and significant investing and financing activity.

2. The current section of Leach Inc s balance sheet at December 31, 2010 and Leach s net income for 2011 was $153,000. Depreciation expense was $24,000. 2011 2010 Current assets Cash $105,000 $99,000 Accountings receivable 110,000 89,000 Inventory 158,000 172,000 Pre paid expenses 27,000 22,000 Total current assets $400,000 $382,000 Current liabilities Accrued expenses payable $ 15,000 $ 5,000 Accounts payable 85,000 92,000 Total current liabilities $100,000 $97,000 Prepare the cash net provided by operating activities section of the company s statement of cash flow for the year ended December 31, 2011, using the indirect method.