PROBLEM 1 - XYZ Corporation's balance sheet and income statement appear below:
Comparative Balance Sheet Ending Beginning Balance
Balance
Assets:
Cash and cash equivalents $34 $27
Accounts receivable 52 61
Inventory 41 40
Property, plant and equipment 531 460
Less accumulated depreciation 330 291
Total assets $328 $297
Liabilities and stockholders' equity:
Accounts payable $98 $109
Bonds payable 65 60
Common stock 71 70
Retained Earnings 94 58
Total liabilities and stockholders' equity $328 $297
Income Statement
Sales $515
Cost of goods sold 312
Gross margin 203
Selling and administrative expense 134
Net operating income 69
Income taxes 21
Net income $48
Prepare a statement of cash flows using the indirect method.
Cash dividends were $12.
PROBLEM 2 - XYZ Corporation's net cash provided by operating activities was $80,000; its net income was $55,000; its capital expenditures were $72,000; and its cash dividends were $14,000.
Required: Determine the company's free cash flow.