Tomas Pest Control Products has the following information available Net Income

Tomas pest control products has the following

This preview shows page 25 - 27 out of 71 pages.

121.Tomas Pest Control Products has the following information available:Net Income$25,000Cash Provided by Operations33,000Cash Sales65,000Capital Expenditures10,000Dividends Paid2,000What is Tomas’ free cash flow?a.$27,000b.$23,000 c.$21,000 d.$10,000Ans: c, LO: 4, Bloom: AP, Difficulty: Hard, Min: 5, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA:ReportingSolution; $33,000 $10,000 $2,000 $21,000122.During 2014, Harvey Industries reported cash provided by operations of $670,000, cashused in investing of $1,039,000, and cash used in financing of $145,000. In addition, cashspent for fixed assets during the period was $404,000. No dividends were paid. Based onthis information, what was Harvey's free cash flow?123.All of the following statements about free cash flow are false except:a124.The cost of goods sold during the year was $183,000. Merchandise inventory decreasedby $8,000 during the year and accounts payable decreased by $4,000 during the year.Using the direct method of reporting cash flows from operating activities, cash paymentsfor merchandise totalFOR INSTRUCTOR USE ONLY13 - 25
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Test Bank for Financial Accounting, Ninth Editiona125.Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease inaccounts payable during the year. Cost of Goods Sold for the year was $185,000. Usingthe direct method of reporting cash flows from operating activities, cash payments madeto suppliers werea.$185,000.b.$197,000.c.$222,000.d.$148,000.Ans: c, LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving,IMA: FSASolution; $185,000 $25,000 $12,000 $222,000a
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