Discuss the changes in companys balance sheet accounts

Question

Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below:

Asset Contra-Asset Accounts:
Cash...................................	$(3,000)
Accounts receivable.................	$(14,000)
Inventory.............................	$3,000
Prepaid expenses.....................	$(7,000)
Long-term investments..............	$80,000
Property, plant and equipment.....	$55,000
Accumulated depreciation.........	$58,000
Liability and Equity Accounts:
Accounts payable....................	$0
Accrued liabilities...................	$15,000
Income taxes payable...............	$(11,000)
Bonds payable........................	$(30,000)
Common stock.......................	$20,000
Retained earnings...................	$62,000

The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.

1. The free cash flow for the year was:

1. $123,000
2. $87,000
3. 142,000
4. 269,000

2. In a statement of cash flows, which of the following would be classified as an investing activity?

1. The sale of the company's own common stock for cash
2. The sale of equipment
3. Interest paid to a lender
4. The issuance of bonds payable