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27 October, 17:36

Pilgrim Corporation reports the following on its financial statements. Cash paid for new equipment, $35,000 Cash collected from customers, $120,000 Paid a note payable, $10,000 Cash collected in exchange for issuing additional shares of Pilgrim stock to stockholders, $15,000 Cash dividends paid, $5,000 The company reports $75,000 of net income for the year and it has $80,000 of cash at year-end. What is the company's free cash flow? Group of answer choices $15,000 $5,000 $35,000 $45,000 $80,000

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  1. 27 October, 18:42
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    Net free cash flow: = $80,000

    Explanation:

    As for the provided information:

    Cash generated during the year

    Less: Ending cash balance

    = Cash flow of the year

    For this:

    Cash paid for purchase of new equipment = - $35,000

    Cash collected from customers = $120,000

    Paid for outstanding note payable = - $10,000

    Cash collected for issue of stock = $15,000

    Cash dividends paid = - $5,000

    Net income = $75,000

    Closing balance of cash = - $80,000

    Net free cash flow: = $80,000
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