Task 4: XYZ corporation had net cash flows from operating activities of $90.000 in last year. During the year, XYZ cost $60.000 for property, plant and equipment; sold them for $12.000; paid dividends of $40.000. a) You should calculate the company's free cash flow and explain the result. b) On January 2021, XYZ purchased a truck for $ 70.000. The Chief accountant supposed that the truck will last six years for 200.000 miles, with an estimated residual value $ 22.000 at the end of that time. Compute the depreciable cost for the year 2021 under the straight-line method. c) You should prepare the journal entry for the depreciation of the truck in 2021
Task 4: XYZ corporation had net cash flows from operating activities of $90.000 in last year. During the year, XYZ cost $60.000 for property, plant and equipment; sold them for $12.000; paid dividends of $40.000. a) You should calculate the company's free cash flow and explain the result. b) On January 2021, XYZ purchased a truck for $ 70.000. The Chief accountant supposed that the truck will last six years for 200.000 miles, with an estimated residual value $ 22.000 at the end of that time. Compute the depreciable cost for the year 2021 under the straight-line method. c) You should prepare the journal entry for the depreciation of the truck in 2021
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter3: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 12P
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Transcribed Image Text:Task 4:
XYZ corporation had net cash flows from operating activities of $90.000 in last year. During the
year, XYZ cost $60.000 for property, plant and equipment; sold them for $12.000; paid dividends
of $40.000.
a) You should calculate the company's free cash flow and explain the result.
b) On January 2021, XYZ purchased a truck for $ 70.000. The Chief accountant supposed
that the truck will last six years for 200.000 miles, with an estimated residual value $
22.000 at the end of that time. Compute the depreciable cost for the year 2021 under the
straight-line method.
c) You should prepare the journal entry for the depreciation of the truck in 2021
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