(1)

Free Skies Inc.'s annual report contained the following information (dollars in millions):

Net loss	$	(11,602	)
Depreciation, amortization, and impairments		36,490
Decrease in receivables		1,345
Increase in inventories		6,866
Decrease in accounts payable		645
Additions to equipment		5,477

Required:

1. Based on this information, compute cash flow from operating activities using the indirect method. (Enter your answers in millions. List loss amounts and cash outflows as negative amounts.)

(2)

During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the companys accounting records:

From the Income Statement
Depreciation expense	$	930
Loss on sale of equipment		4,000
From the Balance Sheet
Beginning equipment		20,300
Ending equipment		11,300
Beginning accumulated depreciation		1,990
Ending accumulated depreciation		1,770

No new equipment was bought during the period.

Required:

1. For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale. (Use the equipment and accumulated depreciation T-accounts to infer the book value of the equipment sold.)

FREE SKIES INC Statement of Cash Flows (Partial) Cash flows from operating activities: Cost of equipment sold Accumulated depreciation on sold equipment Cash received from sale