Presented here are the financial statements of Waterway Company. Your answer is partially correct.

Prepare a statement of cash flows using the indirect method. $($Show amounts that decrease cash flow with either $a-$ sign eg$.-15,000$

or in parenthesis e$.$g$.(15,000).)$

WATERWAY COMPANY

Statement of Cash Flows $-$ Indirect Method

For the Year Ended December $31,2025$

Cash Flows from Operating Actlvities

Net Income

Adjustments to reconcile net income to

Net Cash Provided by Operating Actlvitles

$

$$

:

Increase in Inventory

Increase in Accounts Payable

Decrease In Income Taxes Payable

Net Cash Provided by Operating Actlvitles

Cash Flows from Imvesting Actliviles

Sale of Equipment

Net Cash Provided by Operating Actlvitles

Cash Flows from Financing Activitles

Payment of Dlvidends

Redemptlon of Bonds

Issuance of Common Stock

Net Cash Provlded by Operating Actlvitles $$

Net Increase In Cash

Cash at Beginning of Perlod $($b$)$

Your answer is incorrect.

Compute free cash flow. $($Show amounts that decrease free cash flow with either a $-$ sign eg$.-15,000$ or in parenthesis eg$.).)$

Free cash flow $

Additional data:

Depreciation expense was $$14,000.$

Dividends declared and paid were $$16,000.$

During the year, equipment was sold for $$6,800$ cash. This equipment originally cost $$14,400$ and had accumulated

depreciation of $$7,600$ at the time of sale.

Bonds were redeemed at their carrying value.

Common stockwas issued at par for cash.