Pad 12:48 PM * 96% Document (10) Home Insert Draw Layout Review View Calibri Reg
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Pad 12:48 PM * 96% Document (10) Home Insert Draw Layout Review View Calibri Regular (B 11 B 1 u A. ? ,A4 Homework: Chapter 14 Problems - 2 attempts Score: 0 of 7 pts E14-26 (similar to) Save 2 of 2 (1 complete) Hw Score: 24.55%, 3.68 of 15 pts Question Help Masterson Exercise Equipment, Inc reported the folowing statement of cash ssming Masterson plans similar activity for 2019, wihat would be the anount of fows for 2018 (Click the icon to view the statement of cash fows.) Masterson plans to purchase a truck for $32,000 and a forkilift for $129,000 next year. In addition, it plans to pay cash dividends of $3,000 free cash flow??Abbreviations used: Cash pmts for planned invest Cash payments for planned investments in long-berm assets; NCFA Net cash provided by financing activities: NCOA Net cash provided by operating activities. Use parentheses or a minus sign to show negative free cash flow.) Select the labels and enter the amounts to calculate Masterson's free cash flow for 2019 NCFA Cash pmts for planned invest Cash dividends Free cash flow 21500 184,500 32000 129000 Ended December 31, 2018 Cash Flows from Operating Activities: $138,000 Net Income Adjustments to Reconcle Net Income to Net Cash Provided by (Used for) Operating Activities: Depreciation Expense Increase in Accounts Reoeivable Decrease in Merchandise Inventory Increase in Accounts Payable Decrease in Salaries Payable 46.000 (1.000) 5.000 3.000 (6.500 48,500 Check Answer Net Cash Provided by (Used foe) Operating Activities 84,500 Cash Flows from Investing Activities: Cash Pavment for Acouisition of Plant Assets (87.0001 Cash Flows from Investing Activities: Cash Payment for Acoquisition of Plant Assets Cash Payment for Investments 87,000) (29.000) Net Cash Provided by (Used for) Investing Activities Cash Flows fhom Financing Activities 116,000) Cash Payment of Dividends Cash Payment of Notes Payable Cash Receipt from Issuance of Common Stock 71,500) (5,000) 9.000 Net Cash Provided by (Used for) Financing Activitios Net Increase (Deorease) in Cash Cash Balance, December 31, 2017 Cash Balance, Deoember 31, 2018 1,000 19,000 20,000Explanation / Answer
Calculation of Free Cash Flow (FCF) for the year 2019
FCF = Net cash provied by Operating activities - planned Capital expenditures - Cash dividend
Here,
Net cash provied by Operating activities (NCOA) for year 2019 = $184,500 (Assumption)
Planned capital expenditur for the year 2019 ($32,000 + $129,000) = $161,000
Cash dividend planned to pay = $3,000
Therefore,
Free Cash Flow = $184,500 - 161,000 - $3000 = $20,500
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