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Darwin Company, a manufacturer, has provided the following information pertaining to its assets and liabilities: 12/31/2018 12/31/2019 Account receivable $10,000 $4,000 Inventory $11,000 $12,000 Prepaid

Darwin Company, a manufacturer, has provided the following information pertaining to its assets and liabilities:

12/31/2018

12/31/2019

Account receivable

$10,000

$4,000

Inventory

$11,000

$12,000

Prepaid insurance

$4,000

$7,000

Wage payable

$3,000

$4,000

Unearned revenue

$4,000

$2,000

In addition, Darwin also reported that its net income in 2019 was $10,000 and the depreciation expense in 2019 was $5,000.

(1) How much was Darwins cash flow from operating activities in 2019? (8 points)

Suppose Darwin Company has also provided the following information pertaining to its cash flows from investing and financing activities in 2019:

Cash flows from investing activities

Purchase of property, plant and equipment

(5,000)

Cash flows from financing activities

Proceeds from issuance of stock

3,000

Payment of cash dividends

(2,000)

(2) How much was Darwins free cash flow in 2019? (4 points)

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