Assume that a company provided the following statement of cash flows (all sales are on account): Operating activities: Net income $ 57 Adjustments to convert net income to a cash basis: Depreciation $ 15 Decrease in accounts receivable 2 Increase in inventory (10) Increase in accounts payable 4 11 Net cash provided by (used in) operating activities 68 Investing activities: Additions to property, plant, & equipment (40) Net cash provided by (used in) investing activities (40) Financing activities: Issuance of common stock 5 Cash dividends paid (26) Net cash provided by (used in) financing activities (21) Net increase in cash and cash equivalents 7 Beginning cash and cash equivalents 6 Ending cash and cash equivalents $ 13 How much is the company’s free cash flow? Multiple Choice $19 $(21) $2 $
Assume that a company provided the following statement of cash flows (all sales are on account): Operating activities: Net income $ 57 Adjustments to convert net income to a cash basis: Depreciation $ 15 Decrease in accounts receivable 2 Increase in inventory (10) Increase in accounts payable 4 11 Net cash provided by (used in) operating activities 68 Investing activities: Additions to property, plant, & equipment (40) Net cash provided by (used in) investing activities (40) Financing activities: Issuance of common stock 5 Cash dividends paid (26) Net cash provided by (used in) financing activities (21) Net increase in cash and cash equivalents 7 Beginning cash and cash equivalents 6 Ending cash and cash equivalents $ 13 How much is the company’s free cash flow? Multiple Choice $19 $(21) $2 $
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 8MCQ: Which item is added to net income when computing cash flows from operating activities? a. Gain on...
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Question
Assume that a company provided the following statement of
Operating activities: | ||
---|---|---|
Net income | $ 57 | |
Adjustments to convert net income to a cash basis: | ||
$ 15 | ||
Decrease in |
2 | |
Increase in inventory | (10) | |
Increase in accounts payable | 4 | 11 |
Net cash provided by (used in) operating activities | 68 | |
Investing activities: | ||
Additions to property, plant, & equipment | (40) | |
Net cash provided by (used in) investing activities | (40) | |
Financing activities: | ||
Issuance of common stock | 5 | |
Cash dividends paid | (26) | |
Net cash provided by (used in) financing activities | (21) | |
Net increase in cash and cash equivalents | 7 | |
Beginning cash and cash equivalents | 6 | |
Ending cash and cash equivalents | $ 13 |
How much is the company’s
Multiple Choice
-
$19
-
$(21)
-
$2
-
$23
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