Calculation of free cash flow for Cade.
Cade Corporation's balance sheet and income statement appear below:
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Comparative Balance Sheet
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|
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Ending Balance
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Beginning Balance
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Assets:
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|
|
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Cash and cash equivalents
|
$ 27
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$ 26
|
|
Accounts receivable
|
57
|
53
|
|
Inventory
|
62
|
55
|
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Plant and equipment
|
685
|
580
|
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Accumulated depreciation
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( 404)
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( 355)
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Total assets
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$427
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$359
|
|
Liabilities and stockholders' equity:
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Accounts payable.
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$ 37
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$ 46
|
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Wages payable
|
21
|
25
|
|
Taxes payable
|
15
|
18
|
|
Bonds payable
|
171
|
170
|
|
Deferred taxe
|
23
|
22
|
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Common stock
|
27
|
30
|
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Retained earnings
|
133
|
48
|
|
Total liabilities and stockholders' equity
|
$427
|
$359
|
|
Income Statement
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|
Sales
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$895
|
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Cost of goods sold
|
557
|
|
Gross margin
|
338
|
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Selling and administrative expense
|
177
|
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Net operating income
|
161
|
|
ncome taxes
|
48
|
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Net income
|
$113
|
Cade sold some equipment during the period that had cost $100 and had accumulated depreciation of $85. The equipment was sold for $15.
Prepare a statement of cash flows in good form using the indirect method to determine cash from operations. On the basis of the cash flow statement answer the following questions:
1.How much cash did Cade pay to vendors for inventory during the period?
2.How much cash did Cade pay in income taxes?
3.Calculate free cash flow for Cade.