financeObermeyer Corporation issued the following statement of cash flows for 2017.
$$
\begin{array}{c}
\textbf{OBERMEYER CORPORATION}\\
\textbf{Statement of Cash Flows-Indirect Method}\\
\textbf{For the Year Ended December 31, 2017}\\
\end{array}
$$
$$
\begin{array}{lrr}
\text{Cash flows from operating activities}\\
~~\text{Net income}&&\$59,000\\
~~\text{Adjustments to reconcile net income to net cash providing by operating activities:}\\
~~~\text{Depreciation Equipment}&\$9,100\\
~~~\text{Loss on disposal of equipment}&9,500\\
~~~\text{Increase in inventory}&(5,000)\\
~~~\text{Decrease in accounts receivable}&3,300\\
~~~\text{Decrease in accounts payable}&\underline{(2,200)}&\underline{14,700}\\
~~~~~\text{Net cash provided by operating activities}&&73,700\\
\text{Cash flows from investing activities}\\
~~\text{Sale of investments}&3,100\\
~~\text{Purchase of equipment}&\underline{(27,000)}\\
~~~~~\text{Net cash provided by investing activities}&&(23,900)\\
\text{Cash flows from financing activities}\\
~~\text{Issuance of stock}&20,000\\
~~\text{Payment on long-term note payable}&{(10,000)}\\
~~\text{Payment for dividends }&\underline{(15,000)}\\
~~~~~\text{Net cash provided by financing activities}&&\underline{(5,000)}\\
\text{Net increase in cash}&&44,800\\
\text{Cash at beginning of year}&&\underline{44,800}\\
\text{Cash at end of year}&&\underline{\underline{44,800}}\\
\end{array}
$$
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.” 5th Edition•ISBN: 9780078769047McGraw-Hill Education1,600 solutions
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