Exercise 14-4 Prepare a Statement of Cash Flows; Free Cash Flow [LO1, LO2, LO3] Comparative financial statement data for Holly Company are given below: December 31 This Year Last Year Assets Cash $ 4 $ 7 Accounts receivable 36 29 Inventory 75 61 Total current assets 115 97 Property, plant, and equipment 210 180 Less accumulated depreciation 40 30 Net property, plant, and equipment 170 150 Total assets $ 285 $ 247 Liabilities and Stockholders Equity Accounts payable $ 45 $ 39 Common stock 90 70 Retained earnings 150 138 Total liabilities and stockholders equity $ 285 $ 247 For this year, the company reported net income as follows: Sales $ 500 Cost of goods sold 300 Gross margin 200 Selling and administrative expenses 180 Net income $ 20 This year Holly declared and paid a cash dividend. There were no sales of plant and equipment during this year. The company did not repurchase any of its own stock this year. Required: 1. Using the indirect method, prepare a statement of cash flows for this year. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.) Holly Company Statement of Cash Flows (partial) For This Year Ended December 31 Operating activities: $ Adjustments to convert net income to a cash basis: $ Net cash operating activities Investing activities: Net cash investing activities Financing activities: ` Net cash financing activities Cash, December 31 of last year Cash, December 31 of this year $ 2. Compute Hollys free cash flow for this year. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.) Free cash flow $ rev: 12_06_2012 check my workeBook Links (3)View Hint #1references 2014 McGraw-Hill Education. All rights reserved