Presented below are the financial statements of Sheridan Company.

Sheridan Company Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 77,700 $ 44,400 Accounts receivable 44,400 31,080 Inventory 62,160 44,400 Property, plant, and equipment 133,200 173,160 Accumulated depreciation (71,040 ) (53,280 ) Total $246,420 $239,760 Liabilities and Stockholders Equity Accounts payable $ 42,180 $ 33,300 Income taxes payable 15,540 17,760 Bonds payable 37,740 73,260 Common stock 39,960 31,080 Retained earnings 111,000 84,360 Total $246,420 $239,760

Sheridan Company Income Statement For the Year Ended December 31, 2017 Sales revenue $537,240 Cost of goods sold 388,500 Gross profit 148,740 Selling expenses $39,960 Administrative expenses 13,320 53,280 Income from operations 95,460 Interest expense 6,660 Income before income taxes 88,800 Income tax expense 17,760 Net income $ 71,040

Additional data:

1. Depreciation expense was $38,850. 2. Dividends declared and paid were $44,400. 3. During the year equipment was sold for $18,870 cash. This equipment cost $39,960 originally and had accumulated depreciation of $21,090 at the time of sale.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Sheridan Company Statement of Cash Flows December 31, 2017 For the Year Ended December 31, 2017 For the Quarter Ended December 31, 2017 Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment $ Adjustments to reconcile net income to Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment $ Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Income Taxes Payable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Income Taxes Payable Increase in Inventory Issuance of Common Stock Net Income Payment of Dividends Redemption of Bonds Sale of Equipment Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash $

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Compute free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Free cash flow $

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