Only the free cash flow part please, 17700 is not the answer.
I have the definition of free cash flow here: calculated as net cash from operations less capital expenditures and dividends. But I don't know how to solve it, could you provide steps? thank you.
Sarasota Inc. applies ASPE and had the following statement of financial position at the end of operations for 2019: SARASOTA INC. Statement of Financial Position December 31, 2019 Cash $50,500 Accounts payable $ 93,000 Accounts receivable 90,000 Long-term debt 85,000 Inventory 82,000 Common shares 100,000 Machinery (net) 125,000 Retained earnings 89,500 Trademarks 20,000 $367,500 $367,500 During 2020, the following occurred: 1. Jia Inc. sold some of its trademarks. The trademarks had an unlimited useful life and a cost of $10,000. They were sold for proceeds of $19,500. 2. Machinery was purchased in exchange for long-term debt of $40,000. 3. Long-term debt in the amount of $15,300 was retired before maturity by paying $15,300 cash. 4. An additional $12,500 in common shares was issued. 5. Dividends totalling $14,500 were declared and paid to shareholders. Dividends paid are treated as financing activities. 6. Net income for 2020 was $44,000 after allowing for depreciation of $19,000. 7. Machinery with a carrying value of $18,000 was sold at a gain of $7,000. 8. At December 31, 2020, Cash was $68,200; Accounts Receivable was $111,000; Accounts Payable was $83,000 and Inventory increased to $107,000. cash flow from operating activity net income adjustment depreciation expense gain on machine disposal gain on trademark disposal increase in A/R increase in inventory decrease in A/P net cash used by operating activity Investing cash flow proceed: sale Machine proceed: sale trademark net investing cashflow Financing cash flow divident payment issuance of common share long-term debt retirement net financing cashflow net increase in cash beginning cash ending cash sarasona inc stmt of cash flow year end 19000 -7000 -9500 -21000 -25000 -10000 25000 19500 -14500 12500 -15300 44000 -53500 -9500 44500 -17300 17700 50500 68200 statement of Financial position dec,31 ASSET cash A/R inventory Machinary Trademarks Total Liability and Shareholder's Equity A/P long-tern Debt Common share retained earning total 68200 111000 107000 128000 10000 424200 83000 109700 112500 119000 424200 Your answer is partially correct. Calculate the following ratios: (Round current cash debt coverage ratio and cash debt coverage ratio answers to 2 decimal places, e.g. 52.75. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 1. Free cash flow 39500 2. Current cash debt coverage ratio -0.108 to 1 3. Cash debt coverage ratio -0.05 to 1 eTextbook and Media Assistance Used List of Accounts Assistance Used
