Presented here are the financial statements of Vaughn Company. VAUGHN COMPANY Comparative Balance Sheets December 31 Assets 2022 2021 Cash $36,400 $20,600 Accounts receivable 33,000 18,700 Inventory 29,700 20,000 Property, plant, and equipment 59,800 77,000 Accumulated depreciation (29,700) (23,500) Total $129,200 $112,800 Liabilities and Stockholders' Equity Accounts payable $29,000 $ 16,200 7,500 8,300 Income taxes payable Bonds payable 27,400 33,000 Common stock 18,600 14,300 Retained earnings 46,700 41,000 Total $129,200 $112,800 VAUGHN COMPANY Income Statement For the Year Ended December 31, 2022 Sales revenue $242,900 Cost of goods sold 175,200 Gross profit 67,700 Selling expenses $18,075 Administrative expenses 6,025 24,100 Income from operations 43,600 Interest expense 3,500 Income before income taxes 40,100 Income tax expense 8,020 Net income $32,080 Additional data: 1. Depreciation expense was $15,700. 2. 3. Dividends declared and paid were $26,380. During the year, equipment was sold for $7,700 cash. This equipment originally cost $17,200 and had accumulated depreciation of $9,500 at the time of sale. Bonds were redeemed at their carrying value. 4. 5. Common stock was issued at par for cash. Further analysis reveals the following. 1. Accounts payable pertain to merchandise suppliers. All operating expenses except for depreciation were paid in cash. 2. 3. All depreciation expense is in the selling expense category. 4. All sales and inventory purchases are on account. (a) Prepare a statement of cash flows for Vaughn Company using the direct method. (Show amounts that decrease cash flow with either a - sign eg.-15.000 or in parenthesis e. g. (15,0001) VAUGHN COMPANY Statement of Cash Flows For the Year Ended December 31, 2022 Cash Flows from Operating Activities #cash payments: (b) Compute free cash flow. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Free cash flow $ $