Exercise 5-18 The comparative balance sheets of Pharoah Corporation at the beginning and end of the year 2020 appear below. PHAROAH CORPORATION BALANCE SHEETS Dec. 31, 2020 Jan. 1, 2020 Inc./Dec. Assets Cash $22,270 $14,520 $7,750Inc. Accounts receivable 108,270 89,520 18,750Inc. Equipment 41,270 23,520 17,750Inc. Less: Accumulated Depreciation-Equipment (17,000) (11,000) 6,000Inc. Total $154,810 $116,560 Liabilities and Stockholders' Equity Accounts payable $22,270 $16,520 5,750Inc. Common stock 102,270 81,520 20,750Inc. Retained earnings 30,270 18,520 11,750Inc. Total $154,810 $116,560 Net income of $46,270 was reported, and dividends of $34,520 were paid in 2020. New equipment was purchased and none was sold. PHAROAH CORPORATION Statement of Cash Flows Adjustment to reconcile net income to Compute the current ratio (current assets = current liabilities) as of January 1, 2020, and December 31, 2020. (Round ratios to 1 decimal place., e.g. 4.5.) December 31, 2020 January 1, 2020 Current ratio Compute free cash flow for the year 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Free Cash Flow $ In light of the analysis in (part b), comment on Pharoah's liquidity and financial flexibility. Pharoah company has liquidity and financial flexibility. Click if you would like to Show Work for this question: Open Show Work