P17-7A

7A The following are the financial statements of Nosker Company. Cash from operations $318,000 P17- XLS NOSKER COMPANY Comparative Balance Sheets December 31 Prepare a statement of cash flows-indirect method, and compute free cash flow. Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment 2016 co (LO 2,3) 20,000 nc 14,000 20,000 78,000 oec 2017 s 38,000 30,000 27,000 60,000 (29,000)(24,000) XLS Total $126,000 $108,000 Liabilities ad Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings s 15,000OC 24,000 7,000 27,000 18,000 50,000 8,000 o0 duc 33,000 00 dc 14,000 4000 38,000 $126,000 $108,000 Total 776 17 Statement of Cash Flows NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net income $242,000 175,000 67,000 24,000 43,000 3,000 40,000 8,000 $ 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 origial 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 (a) Prepare a statement of cash flows using the indirect method. (b) Compute free cash flow. (a) Cash from operations 31,500