Data for Tomas Company are presented in P13-7B. Further analysis reveals the following. 1. Accounts payable pertains

Question:

Data for Tomas Company are presented in P13-7B. Further analysis reveals the following.

1. Accounts payable pertains to merchandise creditors.

2. All operating expenses except for depreciation are paid in cash.

Instructions

(a) Prepare a statement of cash flows using the direct method.

(b) Compute free cash flow.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...