Instructions

(a) Prepare a statement of cash flows for 2014 using the indirect method.

(b) Compute free cash flow.

E 5-15 XYZ Corporation's comparative balance sheets are presented below. XYZ CORPORATION Comparative Balance Sheets December 31 Cash Accounts receivable Land Buildings Accumulated depreciationbuildings Total Accounts payable Common stock Retained earnings Total 2014 2013 $ 14,300 21,200 20,000 70,000 (15,000) $ 10,700 23,400 26,000 70,000 (10,000) $110,500 $120,100 $ 12,370 75,000 23,130 $ 31,100 69,000 20,000 $110,500 $120,100 Additional information: 1. Net income was $22,630. Dividends declared and paid were $19,500. 2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $4,900. Instructions (a) Prepare a statement of cash flows for 2014 using the indirect method. (b) Compute free cash flow