Question
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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