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EXERCISE 14 4 Prepare a Statement of Cash Flows; Free Cash Flow LO1 LO2 LO3 Comparative financial statement data for Holly Company are given below Assets Cash

EXERCISE 14–4 Prepare a Statement of Cash Flows; Free Cash Flow [LO1, LO2, LO3]

Comparative financial statement data for Holly Company are given below:

Assets Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 4	$ 7
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . .	36	29
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	75	61
Total current assets . . . . . . . . . . . . . . . . . . . . . . . .	115	97
Property, plant, and equipment . . . . . . . . . . . . . . .	210	180
Less accumulated depreciation . . . . . . . . . . . . .	40	30
Net property, plant, and equipment . . . . . . . . . . . .	170	150
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$285	$247
Liabilities and Stockholders’ Equity Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .	$ 45	$ 39
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . .	90	70
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . .	150	138
Total liabilities and stockholders’ equity . . . . . . . . .	$285	$247

For this year, the company reported net income as follows:

This year Holly declared and paid a cash dividend. There were no sales of plant and equipment during this year. The company did not repurchase any of its own stock this year.

Required:

1. Using the indirect method, prepare a statement of cash flows for this year.

2. Compute Holly’s free cash flow for this year.

Jun 28 2020 View more View Less

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EXERCISE 14 4 Prepare a Statement of Cash Flows; Free Cash Flow LO1 LO2 LO3 Comparative financial statement data for Holly Company are given below Assets Cash

Answer (Solved)

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