Problem 17-7A The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $36,000 $19,000 Accounts receivable 32,000 18,000 Inventory 29,000 20,000 Equipment 59,000 77,000 Accumulated depreciationequipment (29,000 ) (23,000 ) Total $127,000 $111,000 Liabilities and Stockholders Equity Accounts payable $28,000 $ 16,000 Income taxes payable 7,000 8,000 Bonds payable 26,000 32,000 Common stock 17,000 13,000 Retained earnings 49,000 42,000 Total $127,000 $111,000 NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $241,000 Cost of goods sold 175,000 Gross profit 66,000 Operating expenses 23,000 Income from operations 43,000 Interest expense 2,000 Income before income taxes 41,000 Income tax expense 7,000 Net income $34,000 Additional data: 1. Dividends declared and paid were $27,000. 2. During the year equipment was sold for $9,600 cash. This equipment cost $18,000 originally and had a book value of $9,600 at the time of sale. 3. All depreciation expense, $14,400, is in the operating expenses. 4. All sales and purchases are on account.

A) 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).

B) Compute free cash flow