Moskow Corporation issued the following statement of cash flows for 2022.

a. Compute free cash flow for Moskow Corporation. 

b. Explain why free cash fl ow often provides better information than “Net cash provided by operating activities.”

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Moskow Corporation Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2022 Cash flows from operating activities Net income $ 59,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $ 9,100 Decrease in accounts receivable 9,500 (5,000) (2,200) Increase in inventory Decrease in accounts payable Loss on disposal of plant assets Net cash provided by operating activities Cash flows from investing activities Sale of investments 3,300 14,700 73,700 3,100 Purchase of equipment Net cash used by investing activities (24,200) (21,100) Cash flows from financing activities Issuance of stock 20,000 Payment on long-term note payable Payment for dividends Net cash used by financing activities (10,000) (13,000) (3,000) Net increase in cash 49,600 Cash at beginning of year Cash at end of year 13,000 $ 62,600