Chapter /3 227 12. Caldwell Company had cash flows from operating activities of $290,000. totaled $32,000. Cash flows used for purchasing property, plant, and Depreciation expense for the year was $25,000. Cash flows for dividends equipment to maintain existing operations was $60,000. What is the free cash flow? a. $193,000 b. $218,000 c. $230,000 d. $250,000 TRUE/FALSE Instructions: Indicate whether each of the following statements is true or false by placing a check mark in the appropriate column. True False 1. The statement of cash flows is required as part of the 2. Cash outflows from the payment of cash dividends is a 3. Cash receipts from the sale of fixed assets would be 4. Under the direct method, depreciation is the first noncash 5. Under the indirect method, increases in current liabilities type of financing activity._ classified as a cash flow from investing activities.. account balance analyzed.... are deducted from net income reported on the income statement in determining cash flows from operating activities.. Noncash investing and financing activities that may have a significant effect on future cash flows should be included in aseparate schedule to the statement of cash flows. 6. 7. The correct amount to include in cash flows from financing activities is cash dividends paid, not cash dividends declared 8. The analysis of retained earnings provides a starting point for determining cash flows from operating activities under 9. The direct method provides a more accurate figure of cash flows from operating activities than does the indirect method. 10. Under the direct method, the increase in the trade receivables account is deducted from sales to determine the cash received from customers