1. Depreciation Expense was $17,500

2. Dividends declared and paid were $20,000

3. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had accumulated depreciation of $9,500 at the time of sale

Questions:

1. Prepare a statement of cash flows using indirect method

2. Compute free cash flow

Comparative Balance Sheets December 31 2017 Assets 2016 35,000 20,000 Cash 20,000 14,000 Accounts receivable 28,000 20,000 Inventory 60,000 Property, plant, and equipment 78,000 (32,000) (24,000) Accumulated depreciation Total $111,000 $108,000 Liabilities and Stockholders' Equity Accounts payable 19,000 15,000 7,000 Income taxes payable 8,000 Bonds payable 33,000 17,000 14,000 Common stock 18,000 Retained earnings 50,000 38,000 Total $111,000 $108,000