How do you answer this question? And could you please write down all the steps needed to answer also?

3-8 Statement of Cash Flows: Indirect Method A corporation's comparative balance sheets as of 31 December 2017 and 2016 and its income statement for the year ended 31 December 2017 are presented below Balance sheets per 31 december 2017 2016 Assets Cash Accounts receivable, net Merchandise inventory Prepaid rent Fixed assets Accumulated depreciation, fixed assets Total assets 64.300 58.000 120.000 2.000 351.000 68.000 62.000 96.000 3.000 325.000 Liabilities and Stockholders' Equity Accounts payable Bank loan (long-term) Bonds payable Common stock, 5 par value Additional paid-in capital Retained earnings Total liabilities and Stockholders Equity 29.000 30.000 60.000 90.000 160.000 25.000 45.000 40.000 97.500 172.500 95.300 Income Statement For the Year Ended 31 December 2017 Sales Cost of goods sold Gross Margin Operating expenses (including depreciation expense of 45.000) Income from operations Other income (expenses) 960.000 480.000 480.000 435.000 45.000 Loss on sale of fixed assets (1.000) Interest expense Income before income taxes 40.000 Income taxes expense Net income 30.300 During the year the corporation engaged in the following transactions: 1. Sold fixed assets that cost 39.000, on which it had accumulated depreciation of 35.000, for cash at a loss of 1.000 2. Purchased new fixed assets for 65.000. 3. Repaid 10.000 of an existing bank loan and borrowed 25.000 in a new bank loan 4. Converted bonds payable in the amount of 20.000 into 1.500 shares of common stock. This means that the owners of the bonds turned in their bond notes at the corporation and receed 1.500 new issued shares of common stock for them. In this case without any additional payment. 5. Declared and paid 10.000 in cash dividends Required Using the indirect method, prepare a statement of cash flows. Start with net income and consider interest expense and dividend as part of cash from financing activitie s. Assume that income tax payable is included in Accounts payable and that the complete tax cash flow is to be allocated to the operating cash flow a. Compute the free cash flow for 2017 b