INSTRUCTIONS A. Prepare a Statement of Cash Flows B. Determine the Free Cash Flow

The Company has an unmatched pharmaceutical supply chain and procurement expertise, offering customers innovative solutions and optimal efficiencies a portfolio of retail and business brands, including Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as No7, Soap & Glory, Liz Earle, Sleek MakeUP and Botanics diversified and robust profit pools across the U.S., Europe and key emerging markets a unique platform for growth in developed and emerging markets. Due to its expansion, Walgreens was able to declare and pay cash dividends in 2018 for $55.000, as well as redeem $10.000 worth of bonds at their face value for cash and convert $30.000 into common stock. The company, looking out for the best interest of its cash flow and patrimony, issued $130.000 worth or common stock ($1 par) By leveraging these advantages and opportunities, as well as the full benefit of their best practices and expertise, they decided to open new stores in Asia. To do that, the company sold a piece of land at it book value for cash. Afterwards equipment was bought with a cost of $166,000 for cash. Equipment with a cost of $41,000 and a book value of $36,000 was also sold for $34,000 cash. During 2018, operating expenses include depreciation expense of $33,000 and charges from prepaid expenses of $2,000. Also interest expense of $12,000 was paid in cash and an account payable was generated pertain to merchandise suppliers. FINANCIAL STATEMENTS WALGREENS Comparative Balance Sheets December 31st, 2018 Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation - buildings Equipment Accumulated depreciation - equipment TOTALS 2018 $54,000.00 $68,000.00 $54,000.00 $4,000.00 $45,000.00 $200,000.00 $-21,000.00 $193,000.00 $-28,000.00 $569,000.00 2017 $37,000.00 $26,000.00 $0.00 $6,000.00 $70,000.00 $200,000.00 $-11,000.00 $68,000.00 $-10,000.00 $386,000.00 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock ($1 par) Retained earnings TOTALS $23,000.00 $10,000.00 $110,000.00 $220,000.00 $206,000.00 $569,000.00 $40,000.00 $0.00 $150,000.00 $60,000.00 $136,000.00 $386,000.00 WALGREENS Income Statement For the year ended in December 31st, 2018 $890,000.00 Sales revenue Cost of goods sold Operating expenses Interest expenses Loss on disposal of equipment Income before income taxes Income tax expenses Net income $465,000.00 $221,000.00 $12,000.00 $2,000.00 $700.000.00 $190,000.00 $65,000.00 $125,000.00