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Pharoah Company’s comparative balance sheets are presented below: Pharoah Company Comparative Balance Sheets December 31 2020...

Pharoah Company’s comparative balance sheets are presented below:

Pharoah Company
Comparative Balance Sheets
December 31

2020

2019

Cash

$ 17,000

$ 17,500

Accounts receivable

25,000

22,400

Investments

19,850

16,050

Equipment

60,050

69,750

Accumulated depreciation—equipment

(13,750

)

(10,400

)

   Total

$108,150

$115,300

Accounts payable

$ 14,750

$ 11,250

Bonds payable

10,400

30,000

Common stock

49,500

45,200

Retained earnings

33,500

28,850

   Total

$108,150

$115,300


Additional information:

1.Net income was $18,450. Dividends declared and paid were $13,800.

2.Equipment which cost $9,700 and had accumulated depreciation of $1,700 was sold for $3,300.

3.No noncash investing and financing activities occurred during 2020

Prepare a statement of cash flows for 2020 using the indirect method.

Compute free cash flow. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Free cash flow

Solutions

Expert Solution

Compute free cash flow.
=$29,100 -$0-$13,800
= 15,300

ekkarill92 answered 2 years ago
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