Use the Rouse Exercise Equipment data in Exercises E14-23 and E14-24. Rouse plans to purchase a truck for $23,000 and a forklift for $125,000 next year. In addition, it plans to pay cash dividends of $3,500. Assuming Rouse plans similar activity for 2019, what would be the amount of free cash flow?
In Exercise
Rouse Exercise Equipment, Inc. reported the following financial statements for 2018:

Transcribed Image Text:

ROUSE EXERCISE EQUIPMENT, INc. Income Statement Year Ended December 31, 2018 $ 713,000 Net Sales Revenue Cost of Goods Sold 342,000 Gross Profit 371,000 Operating Expenses: $ 54,000 Depreciation Expense Other Operating Expenses 210,000 Total Operating Expenses 264,000 $ 107,000 Net Income ROUSE EXERCISE EQUIPMENT, INC. Comparative Balance Sheet December 31, 2018 and 2017 2018 2017 Assets Current Assets: $ 17,000 $ 16,000 Cash Accounts Receivable 57,000 46,000 Merchandise Inventory 79,000 90,000 Long-term Assets: Plants Assets 260,500 216,400 Accumulated Depreciation--Plant Assets (38,500) (32,400) Investments 96,000 73,000 Total Assets $ 471,000 $ 409,000 Liabilities Current Liabilities: $ 72,000 Accounts Payable Salaries Payable $ 71,000 3,000 5,000 Long-term Liabilities: Notes Payable 61,000 69,000 Total Liabilities 136,000 145,000 Stockholders' Equity Common Stock, no par 45,000 34,000 Retained Earnings 290,000 230,000 Total Stockholders' Equity 335,000 264,000 Total Liabilities and Stockholders' Equity $ 471,000 $ 409,000