MOLINA COMPANY Comparative Balance Sheets December 31 compure free cash ow SO 3, 4) Cash Accounts receivable Merchandise inventory Property, plant, and equipment 28,000 23,000 41,000 33,000 14,000 25,000 $70,000 78,000 27000)43,000 24000) 54000 $126,000 Total $135.000 Liabllities and Stockholders Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 31,000 26,000 20,000 25,000 33,000 $135,000 43,000 20,000 10,000 25,000 Total MOLINA COMPANY Income Statement For the Year Ended December 31, 2008 Sales Cost of goods sold Gross profit Selling expenscs 9,00037000 55,000 7,000 Income from operations Interest expense Income before income taxes Income tax expense Net income Additional data: Dividends of ea0 were declared and paid 2 During the year equipment was sold for $10,000 cash.This equipment cost $13,000 originatiy All depreciation expense, Sereeo, is in the selling expense category. 4 All sales and purchases are on account. 5. Additional equipment was purchased for $5,000 cash. (a) Cash from operations (a) Prepare a statement of cash flows using the indirect method. (b) Compute free cash flow. $13,000 "P14-88 Date for Molina Company are presented in P14-7B. Purther analysis reveals the Prepare a talement of cas compute free cath flow 1. Accounts payabie pertains to merchandise areditors. 2 All operating expenscs cxoept for depreciation are paid in cash. SO 4, 6) o) Cosh from (a) Prepare a statement of cash flows using the direct method. b) Compute free cash flow. $13,000