Question

Megan Corporation's net income last year was $110,000. Changes in the company's balance sheet accounts for the year appear below: Increases (Decreases) Asset and Contra-Asset Accounts: $ (12,600) Cash and cash equivalents Accounts receivable $(26,000) $ 9,000 $(15,400) $92,000 Inventory Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation Liability and Equity Accounts $ 79,000 $ 82,000 Accounts payable $ 0 Accrued liabilities $20,800 Income taxes payable Bonds payable (13,200) $ (48,000) Common stock $32,000 $ 52,400 Retained earnings

Answer 1

Cash Flows from Operating Activities:
Net income	110000
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	82000
Decrease in Accounts receivable	26000
Increase in inventory	-9000
Decrease in Prepaid expenses	15400
Increase in accounts payable	0
Increase in accrued liabilities	20800
Decrease in Income taxes payable	-13200
Net cash provided by operating activities	232000
Net cash provided by operating activities	232000
Less: Purchase of Equipment	-79000
Less: Cash Dividends paid	-57600
Free cash flow for the year	95400