Calculation of free cash flow for cadecade corporations

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Reference no: EM13355740

Calculation of free cash flow for Cade.

Cade Corporation's balance sheet and income statement appear below:

Comparative Balance Sheet
	Ending Balance	Beginning Balance
Assets:
Cash and cash equivalents	$ 27	$ 26
Accounts receivable	57	53
Inventory	62	55
Plant and equipment	685	580
Accumulated depreciation	( 404)	( 355)
Total assets	$427	$359
Liabilities and stockholders' equity:
Accounts payable.	$ 37	$ 46
Wages payable	21	25
Taxes payable	15	18
Bonds payable	171	170
Deferred taxe	23	22
Common stock	27	30
Retained earnings	133	48
Total liabilities and stockholders' equity	$427	$359

Income Statement
Sales	$895
Cost of goods sold	557
Gross margin	338
Selling and administrative expense	177
Net operating income	161
ncome taxes	48
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.

Reference no: EM13355740

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