The following is a condensed version of the comparative balance sheets for Pronghorn Corporation for the...

The following is a condensed version of the comparative balance sheets for Pronghorn Corporation for the last two years at December 31. 2020 2019 Cash $ 230,100 $ 101,400 Accounts receivable 234,000 240,500 Investments 67,600 96,200 Equipment 387,400 312,000 Accumulated Depreciation-Equipment (137,800 ) (115,700 ) Current liabilities 174,200 196,300 Common stock 208,000 208,000 Retained earnings 399,100 230,100 Additional information: Investments were sold at a loss of $13,000; no equipment was sold; cash dividends paid were $39,000; and net income was $208,000.Prepare a statement of cash flows for 2020 for Pronghorn Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)Determine Pronghorn Corporation’s free cash flow.

Expert Solution

Statement of Cash Flows
For the Year Ended December 31, 2020
Cash Flows from Operating Activities:
Net income		208000
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	22100
Loss on sale of investment	13000
Decrease in Accounts Receivable	6500
Decrease in Current liabilities	-22100
		19500
Net cash provided by operating activities		227500
Cash Flows from Investing Activities:
Purchase of Equipment	-75400
Sale of Investments	15600
Net Cash used by Investing Activities		-59800
Cash Flows from Financing Activities
Payment of Cash Dividends		-39000
Net Increase in Cash		128700
Cash at Beginning of Period		101400
Cash at End of Period		230100

2
Net cash provided by operating activities	227500
Less: Purchase of Equipment	-75400
Less: Payment of Cash Dividends	-39000
Free cash flow	113100

ekkarill92 answered 1 year ago

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