E5.15B (LO 3) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Garcia Corporation for the last two years at December 31. Cash Accounts receivable Investments Equipment Less: Accumulated depreciation Current liabilities Capital stock Retained earnings 2020 $442,500 450,000 130,000 745,000 (265,000) 335,000 400,000 767,500 2019 $195,000 462,500 185,000 600,000 Instructions (a) Prepare a statement of cash flows for 2020 for Garcia Corporation. (b) Determine Garcia Corporation's free cash flow. (222,500) 377,500 400,000 442,500 Additional information: Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was $400,000.
E5.15B (LO 3) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Garcia Corporation for the last two years at December 31. Cash Accounts receivable Investments Equipment Less: Accumulated depreciation Current liabilities Capital stock Retained earnings 2020 $442,500 450,000 130,000 745,000 (265,000) 335,000 400,000 767,500 2019 $195,000 462,500 185,000 600,000 Instructions (a) Prepare a statement of cash flows for 2020 for Garcia Corporation. (b) Determine Garcia Corporation's free cash flow. (222,500) 377,500 400,000 442,500 Additional information: Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was $400,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:E5.15B (LO 3) (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative
balance sheets for Garcia Corporation for the last two years at December 31.
Cash
Accounts receivable
Investments.
Equipment
Less: Accumulated depreciation
Current liabilities
Capital stock
Retained earnings
2020
$442,500
450,000
130,000
745,000
(265,000)
335,000
400,000
767,500
2019
$195,000
462,500
185,000
600,000
(222,500)
377,500
400,000
442,500
Additional information:
Investments were sold at a loss of $25,000; no equipment was sold; cash dividends paid were $75,000; and net income was
$400,000.
Instructions
(a) Prepare a statement of cash flows for 2020 for Garcia Corporation.
(b) Determine Garcia Corporation's free cash flow.
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