Q16BE.
Question
Using the information in BE5-14, determine Martinez’s free cash flow, assuming that it reported net cash provided by operating activities of \(400,000.
BE5-14 (L05) Martinez Corporation engaged in the following cash transactions during 2017.
Sale of land and building \)191,000
Purchase of treasury stock 40,000
Purchase of land 37,000
Payment of cash dividend 95,000
Purchase of equipment 53,000
Issuance of common stock 147,000
Retirement of bonds 100,000
Compute the net cash provided (used) by investing activities.
Step-by-Step Solution
VerifiedFree cash flow for the business entity is $215,000.
The cash that will be available with the business entity after paying for the acquisition of the capital assets and any cash dividend paid is known as free cash flow.
Particular | Amount $ |
Cash from operating activities | $400,000 |
Less: Capital expenditure | (90,000) |
Less: Dividend paid | (95,000) |
Free Cash Flow | $215,000 |