Andy Corp engaged in the following cash transactions during 2014: Sale of land a
ID: 2438745 • Letter: A
Question
Andy Corp engaged in the following cash transactions during 2014: Sale of land and building $204,000 Repurchase of company’s own shares 28,000 Purchase of land 47,000 Payment of cash dividend 60,000 Purchase of equipment 36,000 Issuance of common shares 156,000 Retirement of bonds payable 207,000 Andy Corp prepares financial statements in accordance with ASPE. Assume that land is not purchased as an investment. Determine Andy’s Corp free cash flow, assuming that it reported net cash provided by operating activities of $401,000.
(Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Free cash flow $_________
Explanation / Answer
Free cash flow = Net cash provided by operating activities-Payment of cash dividend - Purchase of equipment - Purchase of land = 401000-60000-36000-47000= $258000