Presented below are the financial statements of Sage Hill Ltd. Sage Hill Ltd. Comparative Statements of Financial Position December 31 Assets 2025 2024 Equipment 66,000 85,800 Accumulated depreciation-equipment (31,900) (26,400) Inventory 33,000 22,000 Accounts receivable 36,300 15,400 Cash 40,700 22,000 Total 144,100 118,800 Equity and Liabilities Share capital-ordinary 19,800 15,400 Retained earnings 55,000 41,800 Bonds payable 29,700 36,300 Accounts payable 31,900 16,500 Income taxes payable 7,700 8,800 Total 144,100 118,800 Sage Hill Ltd. Income Statement For the Year Ended December 31, 2025 Sales revenue 266,200 Cost of goods sold 192,500 Gross profit 73,700 Operating expenses 26,400 Income from operations 47,300 Interest expense 3,300 Income before income taxes 44,000 Income tax expense 8,800 Net income 35,200 Additional data: 1. Depreciation expense is 14,630. 2. Dividends declared and paid were 22,000. 3. During the year, equipment was sold for 10,670 cash. This equipment cost 19,800 originally and had accumulated depreciation of 9,130 at the time of sale. SAGE HILL LTD. Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Net Income/(Loss) Adjustments to reconcile net income to Net Cash Provided by Operating Activities Increase in Accounts Receivable For Operating Expenses To Suppliers For Operating Expenses For Income Taxes Net Cash Provided by Operating Activities 259,600 (26,400) (188,100) (5,170) (7,700) 35,200 32,230 67,430 Cash Flows from Investing Activities Sale of Equipment Net Cash Used by Investing Activities Cash Flows from Financing Activities Payment of Dividends Redemption of Bonds Issuance of Ordinary Shares Net Cash Used by Financing Activities Net Increase in Cash Cash at Beginning of Period Cash at End of Period 10,670 (22,000) (6,600) 4,400 10,670 (24,200) 53,900 22,000 75,900 * Your answer is incorrect. Compute free cash flow. Free cash flow 67,430