December 31

2020 2019

Cash$ 21,570$ 10,700

Accounts receivable 18,20023,400

Land18,00026,000

Building70,00070,000

Accumulated depreciation (15,000) (10,000)

Total$112,770$120,100

Accounts payable$ 12,370$31,100

Common stock 75,00069,000

Retained earnings 25,400 20,000

Total$112,770$120,100

Additional information:

1.Net income was $27,900. Dividends declared and paid were $22,500.

2.All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $5,900.

Instructions:

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

Baige Corporation

Statement of Cash Flows

For the Year Ended December 31, 2020

Cash flows from _______________:

Cash flows from _______________:

Cash flows from _______________:

Net increase in cash

Cash at beginning of period

Cash at end of period

(b)Compute free cash flow.