Balance sheets 2016-2017 for Xenox Company, are presented below.

Xenox Company

Balance Sheets

December 31

Assets

2016

2017

Cash

$ 171,000

$ 65,000

A/R

27,000

70,000

Inventories

85,000

66,000

Building

260,000

202,000

Equipment

189,000

230,000

Accumulated Depreciation

(84,000)

(72,000)

Total

$648,000

$561,000

Liabilities and stockholders equity

Accounts payable

$ 46,000

$ 69,000

Interest payable

16,000

10,000

Bonds payable

200,000

180,000

Common stock, $1 par

310,000

230,000

Retained earnings

76,000

72,000

Total

$648,000

$561,000

Depreciation expense of $ 18,000.

2. Cash dividends of $ 60,000 were paid.

3. Interest of $ 5,000 was received.

4. Net income was $180,000.

5. Stocks were issued for $20,000 cash.

6. Equipment with original cost of $ 40,000 and accumulated depreciation of $30,000 was sold for $8,000 cash.

7. Building with a cost of $ 74,000 was purchased during 2012.

8. Equipment with a cost $ 70,000 was purchased by issuing stock.

Instructions:

a- How can you explain the difference between net income and net cash? (2 marks)

b- Prepare the statement of cash flows for 2017 using the indirect method. (5 marks)

c- Calculate the Free Cash-Flow (FCF) and interpret. (2 marks)