P17-7A The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 2016 Assets 2017 38,000 30,000 27,000 60,000 (29,000) $126,000 20,000 14,000 20,000 78,000 (24,000) $108,000 Accounts receivable Inventory Equipment Accumulated depreciation-equipment Total Liabilities and Stockholders' Equit Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 24,000 7,000 27,000 18,000 50,000 $126,000 15,000 8,000 33,000 14,000 38,000 $108,000 Total NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenuc 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 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 (a) Prepare a statement of cash flows using the indirect method. (b) Compute free cash flow