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 = ?
Definition Definition Cash that is left over after a company has paid for its operating and capital expenses. Unlike net income or earnings, free cash flow excludes non-cash expenses of the income statement and includes the expenditures on equipment and assets. Free cash flow also helps potential shareholders to evaluate how quickly the company can pay interest and dividends.
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