Ex3 Presented below are the financial statements of Weller Company WELLER COMPANY Income Statement for the year ending December 31, 20x8 Sales Cost of Merchandise Sold Gross Profit Selling Expenses Administrative Expenses Income from Operations Interest Expense Income before Income Taxes Income Tax Expense Ner Income Assets $242.000 175,000 $67.000 $ 18,000 6000 WELLER COMPANY Comparative Balance Sheet December 31, 2008 Cash Accounts Receivable Merchandise Inventory Property, Plant, and Equipment Accumulated Depreciation Total 24,000 $ 43.000 3,000 $40,000 8.000 $32.000 2008 20X7 $ 35.000 $ 20,000 33,000 14,000 27.000 20.000 60.000 78.000 (29.000 (24.000) $126.000 $ 108,000 Liabilities Accounts Payable Income Taxes Payable Bonds Payable Equity Common Stock Retained Earnings Total $ 29,000 $ 15,000 7,000 27.000 8.000 33.000 18,000 14.000 45,000 38.000 $126.000 $ 108.000 Additional data: 1. All Sales and purchases of Merchandise inventory are on account 2. During the year equipment was sold for $8,500 in Cash This equipment cost $18,000 originally and had a book value of $8,500 at the time of the sale 3. All depreciation expense, $14,500, is in the selling expense category The remaining Selling and all the Administration Expenses are fully paid Salaries 4. Dividends declared and paid, 25,000 5. The Bonds were Serial Bonds and particially paid off this year plus interest 6. The Common Stock was issed for cash Instructions. a) Prepare a Statement of Cash Flows using the indirect method b) Calculate the Free Cash c) Comment on the Free Cash