$5.$ Obermeyer Corporation issued the following statement of cash flows for $2017.$

Obermeyer Corporation

Statement of Cash Flows$$Indirect Method

For the Year Ended December $31,2017$

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$

Loss on disposal of equipment $9,500$

Increase in inventory $(5,000)$

Decrease in accounts receivable $3,300$

Decrease in accounts payable $(2,200)14,700$

Net cash provided by operating activities $73,700$

Cash flows from investing activities

Sale of investments $3,100$

Purchase of equipment $(27,000)$

Net cash used by investing activities $(23,900)$

Cash flows from financing activities

Issuance of stock $20,000$

Payment on long$-$term note payable $(10,000)$

Payment for dividends $(15,000)$

Net cash used by financing activities $(5,000)$

Net increase in cash $44,800$

Cash at beginning of year $13,000$

Cash at end of year $$57,800$

a$)$ Compute free cash flow for Obermeyer Corporation.

b$)$ Explain why free cash flow often provides better information than $$Net cash provided by operating activities$.$

Answer rating: 100% (QA)

a Free cash flow for Obermeyer Corporation Net cash provided by operating activities 73700 Purchase ... View the full answer