1. Compute the free cash flow for the year 2014.

2. Explain why cas declined so sharply during the year 2014.

Foxboro Company Income Statement For the Period January 1, 2014 through December 31, 2014 $ 700,000 400,000 300,000 216,000 Sales Cost of Goods Sold Gross Margin Selling and Administrative Expenses Net Operating Income Gain on Sale of Equipment Income Before Taxes Income Taxes Net Income 84,000 6,000 90,000 27,000 63,000 Foxboro Company Comparative Balance Sheets December 31, 2014 December 31, 2013 Assets Cash $ 11,000 250,000 318,000 7,000 Accounts Receivable Inventory Prepaid Expenses Total Current Assets Plant and Equipment Accumulated Depreciation Net Plant and Equipment Loan to Harker Compan Total Assets 19,000 180,000 270,000 16,000 485,000 500,000 130,000 370,000 586,000 620,000 165,000 455,000 40,000 1,081,000 $ 855,000 $ Liabilities and Stockholders Equity Accounts Payable Accrued Liabilities Income Taxes Payable Total Current Liabilities Bonds Payable Total Liabilities Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders Equity 310,000 42,000 84,000 436,000 190,000 626,000 335,000 120,000 455,000 1,081,000 260,000 50,000 80,000 390,000 100,000 490,000 275,000 90,000 365,000 855,000 7 ADDITIONAL INFORMATION Equipment that had cost $30,000 and on which there was accumulated depreciation of $10,000 was sold during 2014 for $26,000. The company declared and paid a cash 48 dividend during 2014. It did not retire any bonds or repurchase any of its own stock. A