P13-7A. Presented below are the nancial statements of Nosker Company.

Nosker Company Comparative Balance Sheets

December 31

Assets 2015 2014

Cash 38,000 20,000

Accounts Receivable 30,000 14,000

Inventory 27,000 20,000

Equipment 60,000 78,000

Accumulated Dep-Equipment (29,000) (24,000)

Total 126,000 108,000

Liabilities & Stockholder's equity

Accounts Payable 24,000 15,000

Income Taxes payable 7,000 8,000

Bonds Payable 27,000 33,000

Common Stock 18,000 14,000

Retained Earnings 50,000 38,000

Total 126,000 108,000

Nosker Company

Income Statement

For the year ended December 31,2015

Sales Revenue 242,000

Cost of goods sold 175,000

Gross profit 67,000

Operating Expenses 24,000

Income from operations 43,000

Interest Expense 3,000

Income before income taxes 40,000

Income tax expense 8,000

Net income 32,000

Additional data:

1) Dividends declared and paid were $20,000.

2) During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.

3) All depreciation expense, $14,500, is in the operating expenses.

4) All sales and purchases are on account.

Instructions

1) Prepare a statement of cash ows using the indirect method. Cash from operations should equal 31,500

2) Compute free cash ow.