and ( FREE CASH FLOW )

Presented below are the financial statements of Novak Company Ltd. NOVAK COMPANY LTD. Comparative Statements of Financial Position December 31 Assets 2017 2016 Equipment 59,910 77,970 Accumulated depreciation-equipment (29,830) (23,190 ) Inventory 29,510 20,190 Accounts receivable 32,270 19,670 Cash 36,010 19,840 Total 127,870 114,480 Equity and Liabilities Share capital-ordinary Retained earnings Bonds payable Accounts payable Income taxes payable Total 18,370 45,890 27,610 28,920 7,080 127,870 14,970 42,210 32,640 16,470 8,190 114,480 NOVAK COMPANY LTD. Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net income 241,450 175,940 65,510 23,160 42,350 3,030 39,320 7,670 31,650 Additional data: 1. Depreciation expense is 15,060. 2. Dividends declared and paid were 27,970. During the year, equipment was sold for 9,640 cash. This equipment cost 18,060 originally and had accumulated depreciation of 8,420 at the time of sale. 3. Prepare a statement of cash flows using the indirect method. (S decrease cash flow with either a - sign e.g. -15,000 or in (15,000).) NOVAK COMPANY LTD. Partial Statement of Cash Flows For the Year Ended Cash Flows from op Net Income Adjustments to reconcile net income to Net Cash Provided Depreciation Expert Increase in Account Decrease in Income Increase in Account Increase in Inventor Net Cash Provided t Cash Flows from In Sale of Equipment DIIN! III DO ODIO Cash Flows from Fin Issuance of Ordinar Redemption of Bong Payment of Dividend Net Cash Provided Net Increase in Casi Cash at Beginning Cash at End of Peric