Here are comparative balance sheets for Migitsu Company. Prepare a statement of cash flowsindirect method.

MIGITSU COMPANY

Comparative Balance Sheets

December 31

Assets 20172016

Cash $73,000$22,000

Accounts receivable 87,00076,000

Inventories170,000191,000

Land72,000100,000

Equipment260,000200,000

Accumulated depreciation(66,000)(32,000)

Total $596,000 $557,000

Liabilities and Stockholders' Equity

Accounts payable $37,000 $47,000

Bonds payable 150,000210,000

Common stock ($1 par) 216,000 174,000

Retained earnings193,000126,000

Total $ 596,000 $ 557,000

Additional information:

1. Net income for 2017 was $100,000.

2. Cash dividends of $33,000 were declared and paid.

3. Bonds payable amounting to $60,000 were redeemed for cash $60,000.

4. Common stock was issued for $42,000 cash.

5. Equipment that cost $50,000 and had a book value of $30,000 was sold for $36,000 during 2017; land was sold at cost.

Instructions

(a) Prepare a statement of cash flows for 2017 using the indirect method.

(b) Compute free cash flow for 2017.