1. MIGITSU COMPANY Comparative Balance Sheets December 31

Cash		$72,000			$21,000
Accounts receivable		87,000			77,000
Inventories		168,000			190,000
Land		70,000			99,000
Equipment		262,000			202,000
Accumulated depreciation		(66,000)			(34,000)
Total		$593,000			$555,000
Liabilities and Stockholders Equity
Accounts payable		$35,000			$45,000
Bonds payable		151,000			208,000
Common stock ($1 par)		218,000			176,000
Retained earnings		189,000			126,000
Total		$593,000			$555,000

Additional information: 1. Net income for 2020 was $97,000.

2. Cash dividends of $34,000 were declared and paid.

3. Bonds payable amounting to $57,000 were redeemed for cash $57,000.

4. Common stock was issued for $42,000 cash.

5. Equipment that cost $45,000 and had a book value of $27,000 was sold for $35,000 during 2020; land was sold at cost.

PART A. Prepare a statement of cash flows for 2020 using the indirect method.

PART B. Compute free cash flow

2.

2020 2019

Cash $14,900 $10,400

Accounts receivable. 21,500. 23,400

Land. 19,700 25,900

Buildings 70,100 70,100

Accumulated depreciationbuildings. (14,800) (10,700)

Total $111,400 $119,100

Accounts payable $12,100 $28,300

Common stock 75,400 73,600

Retained earnings 23,900 17,200

Total $111,400 $119,100

Additional information:

1. Net income was $22,400. Dividends declared and paid were $15,700

2. No noncash investing and financing activities occurred during 2020.

3. The land was sold for cash of $4,900.

PART A.) Prepare a statement of cash flows for 2020 using the indirect method.

PART B.) Compute free cash flow