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 $ 40,800 Adjustments to convert net income to cash basis: Depreciation $ 21,200 Increase in accounts receivable (61,900 ) Increase in inventory (26,400 ) Decrease in prepaid expenses 10,900 Increase in accounts payable 53,700 Decrease in accrued liabilities (10,900 ) Increase in income taxes payable 3,900 (9,500 ) Net cash provided by (used in) operating activities 31,300 Investing activities: Proceeds from the sale of equipment 14,200 Loan to Thomas Company (40,500 ) Additions to plant and equipment (121,700 ) Net cash provided by (used in) investing activities (148,000 ) Financing activities: Increase in bonds payable 88,500 Increase in common stock 38,700 Cash dividends (28,500 ) Net cash provided by (used in) financing activities 98,700 Net decrease in cash and cash equivalents (18,000 ) Beginning cash and cash equivalents 28,200 Ending cash and cash equivalents $ 10,200

Explanation / Answer

Free cash flow for the current year=31300-121700-28500= $(118900) or -118900

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