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Free cash flow; effect of dividends paid; LBY Company total

4. Free cash flow can be utilized to
A. retire stock or debt.
B. acquire new assets.
C. pay additional dividends.
D. All of the above are correct.

5. The payment of cash dividends will
A. Increase the operating section of the statement of cash flows.
B. Decrease the operating section of the statement of cash flows.
C. Increase the financing section of the statement of cash flows.
D. Decrease the financing section of the statement of cash flows.

6. Company showed the following balances at the end of its first year:

Cash $15,000
Prepaid insurance 5,000
Accounts receivable 2,500
Accounts payable 3,000
Notes payable 6,000
Common stock 10,000
Dividends 500
Revenues 15,000
Expenses 13,000

What did LBJ Company show as total debits on its trial balance?
A. $34,000
B. $36,000
C. $70,000
D. $31,000

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4. Free cash flow can be utilized to

D. All of the above are correct.
( Can be used for any ...

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Solution discusses the Free cash flow; effect of dividends paid; LBY Company total debits on the trial balance

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