Problem 17-8A

Presented below are the financial statements of Nosker Company.

NOSKER COMPANY Comparative balance Sheets December 31
Assets	2014	2013
Cash	$34,560	$20,640
Accounts receivable	32,310	19,370
Inventory	26,320	20,200
Equipment	59,730	77,430
Accumulated depreciation equipment	(29,450)	(23,610)
Total	$123,470	$114,030
Liabilities and Stockholfers' Equity
Accounts payable	$28,890	$16,370
Income taxes payable	7,070	8,210
Bonds payable	27,650	32,090
Common stock	17,090	13,530
Retained Earnings	42,770	43,830
Total	$123,470	$114,030
NOSKER COMPANY Income Statement For the year Ended December 31, 2014
Sales revenue	$242,820
Cost of goods sold	175,370
Gross profit	67,450
Operating expenses	25,000
Income from operations	42,450
Interest expense	3,480
Income before income taxes	38,970
Income tax expense	7,190
Net income	$31,780

Additional data:

1. Dividends declared and apid were $32,840.

2. During the year equipment was sold for $8,210 cash. This equipment cost 17,700 originally and had a book value of $8,210 at the time of sale.

3. All depreciation expense, $15,330, is in the operating expenses.

4. All salees and purchases are on account.

Further analysis reveals the following.

1. Accounts payable pertain to merchandise suppliers.

2. All operating expenses except for depreciation were paid in cash.

A. Prepare a statement of cash flows for Nosker Company using the direct method.

B. Compute free cash flow.