P17-6B

Prepare a cash flow statementindirect methodand calculate free cash flow.

(LO 2, 4) AP

Condensed financial data of Wanwright Company are shown below. Wanwright reports under ASPE.

WANWRIGHT COMPANY Balance Sheet December 31
Assets	2017	2016
Cash	$92,700	$33,400
Accounts receivable	70,800	37,000
Inventory	131,900	102,650
Investments	84,500	107,000
Plant assets	310,000	205,000
Accumulated depreciation	(49,500)	(40,000)
Total	$640,400	$445,050
Liabilities and Shareholders' Equity
Accounts payable	$62,700	$ 48,280
Salaries payable	15,100	18,830
Notes payable	140,000	70,000
Common shares	250,000	200,000
Retained earnings	172,600	107,940
Total	$640,400	$445,050
WANWRIGHT COMPANY Income Statement For the Year Ended December 31, 2017
Sales	$297,500
Gain on sale of plant assets	5,000
	302,500
Less:
Cost of goods sold	119,460
Operating expenses	14,670
Depreciation expense	35,500
Income taxes	27,270
Interest expense	2,940
Total expenses	199,840
Profit	$102,660

Additional information:

• 1.New plant assets costing $141,000 were purchased for cash during the year.
• 2.Investments were sold at cost.
• 3.Plant assets costing $36,000 were sold for $15,000, resulting in a gain of $5,000.
• 4.A cash dividend of $38,000 was declared and paid during the year.

Instructions

(a)

Prepare a statement of cash flows using the indirect method.