Here are comparative balance sheets for Jeffrey Company.

JEFFREY COMPANY

Comparative Balance Sheets

December 31

Assets 2022 2021

Cash $ 7,300 $ 2,200

Accounts receivable 8,700 7,600

Inventories 17,000 19,100

Land 7,200 10,000

Equipment 26,000 20,000

Accumulated depreciation (6,600) (3,200)

Total $ 59,600 $ 55,700

Liabilities and Stockholders Equity

Accounts payable $ 3,700 $ 4,700

Bonds payable 15,000 21,000

Common stock ($1 par) 21,600 17,400

Retained earnings 19,300 12,600

Total $ 59,600 $ 55,700

Additional information:

1. Net income for 2022 was $10,000.

2. Cash dividends of $3,300 were declared and paid.

3. Bonds payable amounting to $6,000 were redeemed for cash $6,000.

4. Common stock was issued for $4,200 cash.

5. Equipment that cost $5,000 and had a book value of $3,000 was sold for $3,600 during 2022; land was sold at cost.

Instructions

(a) Prepare a statement of cash flows for 2022 using the indirect method.

(b) Compute free cash flow for 2022.