Prepare the op aung Aclivities section o the bperg f the statement of cash flows using the direct method. The following are the financial statements of Nosker Company LO 4) XLS NOSKER COMPANY Comparative Balance Sheets December 31 Prepare a stat 2017 38,000 30,000 27,000 60,000 (29,000) 2016 Cash Accounts receivable Inventory Equipment compute free (LO 2, 3) s 20,000 14,000 20,000 78,000 (24,000) $108,000 ed depreciation-equipment XLS Total $126,000 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 24,000 7,000 27,000 18,000 50,000 $126,000 S 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 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 nt of Cash Flows 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