Northwest Corporation Income Statement For the Year Ended December 31, 20x2 Net Sales $1,650,000 920,000 $730,000 Cost of Goods Sold Gross Margin Operating Expenses (including Dep Exp of $12,000 on Equip, Amortization Expense of $4,800) Operating Income Other Income (Expenses) Interest Expense Bldgs and $23,100 on 470,000 $ 260,000 ($55,000) 3,400 12,500 Dividend Income Gain on Sale of Investments Loss on Disposal of Equipment (2,300) (41,400) $218,600 52,200 Income Before Income Taxes Income Taxes $166,400 Net Income Northwest Corporation Comparative Balance Sheets December 31m 20x2 and 20x1 Increase 20x2 20x1 Change or Decrease Assets 115,850 $121,850 ($ 6,000) | Decrease Cash Accounts Receivable (net) 296,000 314,500 (18,500) Decrease Inventory 322,000 301,000 21,000 Increase Prepaid Expenses 7,800 5,800 2,000 Increase (50,000) Decrease 36,000 86,000 125,000 Long-Term Investments Land 25,000 Increase 150,000 Buildings 462,000 462,000 Accumulated Depreciation, Buildings (91,000) (79,000) (12,000) Increase (7,500) | Decrease 2,200Decrease Equipment Accumulated Depreciation, Equipment Intangible Assets 159,730 167,230 (43,400) 19,200 (45,600) 24,000 (4,800) Decrease S 48,600 $1,434,180 $1,482,780 Total Assets Liabilities and Stockholders' Equity S 233,750(S100,000) | Decrease Accounts Payable 133,750 Accrued Liabilities 5,000 5,000 Increase Income Taxes Payable 20,000 20,000 Increase (70,000) Decrease Notes Payable 75,700 145,700 Bonds Payable 210,000 310,000 (100,000) Decrease (20,000)| Decrease Mortgage Payable Common Stock, $10 par value 330,000 350,000 360,000 90,000 300,000 60,000 Increase Paid-in-Capital in Excess of Par Value 50,000 40,000 Increase Retained Earnings 209,730 93,330 116,400 Increase Total Liabilities and Stockholders' Equity$1,434,180$1,482,780 (S48,600) The following additional information was taken from the company's records: Long-term investments (available-for-sale securities) that cost $70,000 were sold at a a. gain of $12,500; additional long-term investments were made in the amounts of $20,000 b. Five acres of land were purchased for $25,000 to build a parking lot Equipment that cost $37,500 with accumulated depreciation of $25,300 was sold at a loss of $2,300; new C. purchased equipment costing $30,000 was d. Notes payable in the amount of $100,000 were repaid; borrowed by signing notes payable an additional $30,000 was e. Bonds payable in the amount of $100,000 were converted into 6,000 shares of common stock The Mortgage Payable account was reduced by $20,000 during the year f. g. Cash dividends declared and paid were $50,000 TO DO 1. Prepare a schedule of cash flows from operating activities using the (a) indirect method and (b) direct method 2. Prepare a statement of cash flows using the indirect method 3. Compute cash flow yield, cash flows to sales, cash flows to assets, and free cash flow for 20x2