Flounder has an aggressive growth plan, which will require significant investments in plant and equipment over the next several years. Preliminary plans call for an investment of over $500,000 in the next year. Compute Flounders free cash flow.

Free Cash Flow =

Accounting, Analysis, and Principles (Part Level Submission) The income statement for the year ended December 31, 2017, for Flounder Manufacturing Company contains the following condensed information FLOUNDER CO INCOME STATEMENT evenues Operating expenses (excluding depreciation) Depreciation expense Income before income tax Income tax expense Net income $6,580,000 $4,917,000 867,000 5,784,000 796,000 358,200 $ 437,800 Included in operating expenses is a $28,000 loss resulting from the sale of machinery for $267,000 cash. The company purchased machinery at a cost of $737,000 Flounder reports the following balances on its comparative balance sheets at December 31 FLOUNDER CO COMPARATIVE BALANCE SHEETS (PARTIAL) 2017 Cash Accounts receivable Inventory Accounts payable 2016 $127,000 607,000 868,000 508,000 $658,800 782,000 832,500 523,500 Income tax expense of $358,200 represents the amount paid in 2017. Dividends declared and paid in 2017 totaled $207,000 FLOUNDER COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income 437,800 Adjustments to reconcile net income to Net Cash Provided by Operating Activities 867,000 Depreciation Expense Loss on Sale of Machinery Increase in Accounts Receivable Decrease in Inventory Increase in Accounts Payable 28000 175000 35500 15500 771000 Net Cash Provided by Operating Activities 1208800 Cash Flows from Investing Activities Net Cash Provided by Operating Activities 1208800 Cash Flows from Investing Activities Purchase of Machinery Sale of Machinery Net Cash Used by Investing Activities -737,000 267,000 470000 Cash Flows from Financing Activities Payment of Cash Dividends -207,000 Net Increase in Cash 531800 Cash at Beginning of Period 127,000 Cash at End of Period 658,800