For the Year Ended December 31, 2017 Cash flows from operating activities $86,08
ID: 2536833 • Letter: F
Question
For the Year Ended December 31, 2017 Cash flows from operating activities $86,081 Net income Adjustments to reconcile net income to net cash provided by operating activities: $13,277 Depreciation expense Decrease in accounts receivable Increase in inventory Decrease in accounts payable Loss on disposal of plant assets 13,861 (7,295) (3,210) 4,815 21,448 107,529 Net cash provided by operating activities Cash flows from investing activities Sale of investments 4,523 Purchase of equipment (35,308) Net cash used by investing activities (30,785) Cash flows from financing activities Issuance of stock Payment on long-term note payable Payment for dividends 29,180 (14,590) (18,967) (4,377) 72,367 18,967 $91,334 Net cash used by financing activities Net increase in cash Cash at beginning of year Cash at end of year (a) Compute free cash flow for Blossom Company. (Show a negative free cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).)Explanation / Answer
Free cash flow measures company’s financial performance.It is calculated as operating cash flow minus capital expenditure. It is a cash that company is able to generate after spending the money required to maintain or expand its asset base. Free Cash flow for Blossom Company = Net cash provided by operating activities - Purchase of equipment Free Cash flow for Blossom Company = $107529 - $35308 = $72,221