Data for Cheaney Company are presented in P13-7A. Further analysis reveals the following. 1. Accounts payable pertain

Question:

Data for Cheaney Company are presented in P13-7A. Further analysis reveals the following.

1. Accounts payable pertain to merchandise suppliers.

2. All operating expenses except for depreciation were paid in cash.

Instructions

(a) Prepare a statement of cash flows for Cheaney Company using the direct method.

(b) Compute free cash flow.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...