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P14.7 (LO 2, 3) Presented below are the financial statements of Rajesh Ltd. Rajesh Ltd. Comparative Statements of Financial Position December 31 Assets 2020 Equipment

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P14.7 (LO 2, 3) Presented below are the financial statements of Rajesh Ltd. Rajesh Ltd. Comparative Statements of Financial Position December 31 Assets 2020 Equipment 60,000 Accumulated depreciation-equipment (29,000) Inventory 30,000 Accounts receivable 33,000 Cash 37,000 Total 131,000 2019 78,000 (24,000) 20,000 14.000 20,000 108,000 Equity and Liabilities Share capital-ordinary Retained earnings Bonds payable Accounts payable Income taxes payable Total 18,000 50,000 27,000 29,000 7.000 131,000 14,000 38,000 33,000 15,000 8,000 108,000 Rajesh Ltd. Income Statement For the Year Ended December 31, 2020 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. Depreciation expense is 13,300. 2. Dividends declared and paid were 20,000. 3. During the year, equipment was sold for 9,700 cash. This equipment cost 18,000 originally and had accumulated depreciation of 8,300 at the time of sale. Maition 1. New 1. 01 sold 3. Bon A. Acu Vista Instructions a. Prepare a statement of cash flows using the indirect method. b. Compute free cash flow. hree

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