Apex Company prepared the statement of cash flows for the current year that is shown below:Apex CompanyStatement of Cash Flows—Indirect MethodOperating activities:Net income ........................................................................................ $ 40,000Adjustments to convert net income to cash basis:Depreciation charges .................................................................... $ 22,000Increase in accounts receivable .................................................... (60,000)Increase in inventory ..................................................................... (25,000)Decrease in prepaid expenses ...................................................... 9,000Increase in accounts payable ........................................................ 55,000Decrease in accrued liabilities ....................................................... (12,000)Increase in deferred income taxes ................................................ 5,000 (6,000)Net cash provided by operating activities ......................................... 34,000Investing activities:Proceeds from the sale of equipment ............................................... 14,000Loan to Thomas Company ................................................................ (40,000)Additions to plant and equipment ...................................................... (110,000)Net cash used for investing activities ................................................ (136,000)Financing activities:Increase in bonds payable ................................................................ 90,000Increase in common stock ................................................................ 40,000Cash dividends ................................................................................. (30,000)Net cash provided by financing activities .......................................... 100,000Net decrease in cash ........................................................................ (2,000)Cash balance, beginning of year ...................................................... 27,000Cash balance, end of year ................................................................ $ 25,000Required:Compute Apex Company’s free cash flow for the current year.
Apex Company prepared the statement of
Apex Company
Statement of Cash Flows—Indirect Method
Operating activities:
Net income ........................................................................................ $ 40,000
Adjustments to convert net income to cash basis:
Increase in accounts receivable .................................................... (60,000)
Increase in inventory ..................................................................... (25,000)
Decrease in prepaid expenses ...................................................... 9,000
Increase in accounts payable ........................................................ 55,000
Decrease in accrued liabilities ....................................................... (12,000)
Increase in
Net cash provided by operating activities ......................................... 34,000
Investing activities:
Proceeds from the sale of equipment ............................................... 14,000
Loan to Thomas Company ................................................................ (40,000)
Additions to plant and equipment ...................................................... (110,000)
Net cash used for investing activities ................................................ (136,000)
Financing activities:
Increase in bonds payable ................................................................ 90,000
Increase in common stock ................................................................ 40,000
Cash dividends ................................................................................. (30,000)
Net cash provided by financing activities .......................................... 100,000
Net decrease in cash ........................................................................ (2,000)
Cash balance, beginning of year ...................................................... 27,000
Cash balance, end of year ................................................................ $ 25,000
Required:
Compute Apex Company’s
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