P17-7A Presented below are the financial statements of Weller Company. WELLER COMPANY Comparative Balance Sheets December 31 Assets 2012 2011 Cash $ 35,000 $ 20,000 Accounts receivable 33,000 14,000 Merchandise inventory 27,000 20,000 Property, Plant and Equipment 60,000 78,000 Accumulated depreciation (29,000) (24,000) Total $126,000 $108,000 Liabilities and Stockholders' Equity Accounts payable $ 29,000 $ 15,000 Income taxes payable 7,000 8,000 Bonds payable 27,000 33,000 Common stock 18,000 14,000 Retained earnings 45,000 38,000 Total $126,000 $108,000 WELLER COMPANY Income Statement For the Year Ended December 31, 2012 Sales $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: Dividends declared and paid were $25,000. 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. All depreciation expense, $14,500, is in the selling expense category. All sales and purchases are on account. Prepare a statement of cash flows using the indirect method. (List multiple entries with a positive cash flow first and then the negative cash flow. List amounts from largest to smallest e.g. 10, 5, 3, 2. If amount decreases cash flow, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Compute free cash flow