E11.3. Analyzing Cash Flows (Medium) Consider the following comparative balance sheets for the Liquidity Company: Operating cash Accounts receivable Inventories Land (unamortized cost) Plant assets Less: accumulated depreciation Accounts payable Capital stock 2012 $ 435,000 40,000 100,000 400,000 200,000 (100,000) 1,075,000 25,000 1.050.000 $1,075,000 December 31 a. Calculate free cash flow generated during 2012. b. Where did the increase in cash come from? $ 2011 50,000 -0- -0- 800,000 200,000 -0- 1,050,000 -0- 1,050,000 $1,050,000 The company paid a dividend of $150,000 during 2012 and there were no equity contribu- tions or stock repurchases. c. How would your calculation in part (a) change if the firm invested in short-term deposits rather than paying a dividend