Apex Company prepared the statement of cash flows for the current year that is s

Question

Apex Company prepared the statement of cash flows for the current year that is shown below:

Required:

Compute Apex Company’s free cash flow for the current year. (Negative amount should be indicated by a minus sign.)

Apex Company
Statement of Cash Flows—Indirect Method Operating activities: Net income $ 40,000 Adjustments to convert net income to cash basis: Depreciation $ 22,000 Increase in accounts receivable (60,000 ) Increase in inventory (25,000 ) Decrease in prepaid expenses 9,000 Increase in accounts payable 55,000 Decrease in accrued liabilities (12,000 ) Increase in income taxes payable 5,000 (6,000 ) Net cash provided by (used in) operating activities 34,000 Investing activities: Proceeds from the sale of equipment 14,000 Loan to Thomas Company (40,000 ) Additions to plant and equipment (110,000 ) Net cash provided by (used in) investing activities (136,000 ) Financing activities: Increase in bonds payable 90,000 Increase in common stock 40,000 Cash dividends (30,000 ) Net cash provided by (used in) financing activities 100,000 Net decrease in cash and cash equivalents (2,000 ) Beginning cash and cash equivalents 27,000 Ending cash and cash equivalents $ 25,000

Explanation / Answer

Apex Company’s free cash flow for the current year = – $106000

Explanation;

Apex Company’s free cash flow for the current year will be calculated as follow;

Net cash provided by operating activities

$34000

Capital expenditure

($110000)

Cash dividend

($30000)

Free cash flow for the current year

– $106000

Net cash provided by operating activities

$34000

Capital expenditure

($110000)

Cash dividend

($30000)

Free cash flow for the current year

– $106000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.