Required: Compute Apex Company's free cash flow for the current year. (Negative amount should be indicated by a minus sign.) Free Cash Flow = ?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

What is the free cash flow

Apex Company prepared the statement of cash flows for the current year that is shown below:
Apex Company
Statement of Cash Flows–Indirect Method
Operating activities:
Net income
$ 40,300
Adjustments to convert net income to cash basis:
Depreciation
$ 21,300
(60,600)
(26,800)
9,900
54,600
(11,400)
4,300
Increase in accounts receivable
Increase in inventory
Decrease in prepaid expenses
Increase in accounts payable
Decrease in accrued liabilities
Increase in income taxes payable
(8,700)
31,600
Net cash provided by (used in) operating activities
Investing activities:
Proceeds from the sale of equipment
Loan to Thomas Company
Additions to plant and equipment
Net cash provided by (used in) investing activities
Financing activities:
Increase in bonds payable
15,000
(40,600)
(120,500)
(146,100)
88,700
38,400
(29,900)
Increase in common stock
Cash dividends
Net cash provided by (used in) financing activities
Net decrease in cash and cash equivalents
Beginning cash and cash equivalents
97,200
(17,300)
28,100
Ending cash and cash equivalents
$ 10,800
Required:
Compute Apex Company's free cash flow for the current year. (Negative amount should be indicated by a minus
sign.)
Free Cash Flow = ?
Transcribed Image Text:Apex Company prepared the statement of cash flows for the current year that is shown below: Apex Company Statement of Cash Flows–Indirect Method Operating activities: Net income $ 40,300 Adjustments to convert net income to cash basis: Depreciation $ 21,300 (60,600) (26,800) 9,900 54,600 (11,400) 4,300 Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Increase in accounts payable Decrease in accrued liabilities Increase in income taxes payable (8,700) 31,600 Net cash provided by (used in) operating activities Investing activities: Proceeds from the sale of equipment Loan to Thomas Company Additions to plant and equipment Net cash provided by (used in) investing activities Financing activities: Increase in bonds payable 15,000 (40,600) (120,500) (146,100) 88,700 38,400 (29,900) Increase in common stock Cash dividends Net cash provided by (used in) financing activities Net decrease in cash and cash equivalents Beginning cash and cash equivalents 97,200 (17,300) 28,100 Ending cash and cash equivalents $ 10,800 Required: Compute Apex Company's free cash flow for the current year. (Negative amount should be indicated by a minus sign.) Free Cash Flow = ?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Uses Of Excess Cash
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education