Question 1 Waterways prepared the balance sheet and income statement for the irrigation installation division for 2020. Now the company also needs to prepare a statement of cash flows for the same division. The comparative balance sheets for Waterways Corporation's Irrigation Installation Division for the years 2019 and 2020 and the income statement for the year 2020 are presented below. Additional information: 1. Waterways sold a company vehicle for $24,000. The vehicle had been used for 10 years. It cost $80,700 when purchased and had a 10- year life and a $6,100 salvage value. Straight-line depreciation was used. 2. Waterways purchased with cash new equipment costing $209,600 3. Prepaid expenses increased by $34,200. All changes in accounts payable relate to inventory purchases 2019 $739,500 540,100 7,500 42,300 1,329,400 WATERWAYS CORPORATION-INSTALLATION DIVISION Balance Sheets December 31 Assets 2020 Current assets Cash $840,700 Accounts receivable 676,700 Work in process 699,000 Inventory 16,700 Prepaid expenses 76,500 Total current assets 2310 200 Property, plant, and equipment Land 302,000 Buildings 450,000 Equipment 929.600 Furnishings 40,000 Accumulated depreciation (479,000) Total property, plant and equipment 1.242,600 Total assets $3,552,800 Liabilities and Stockholders' Equity Current liabilities Accounts payable $158200 Income taxes payable 100,800 Wages payable 4,500 Interest payable 1,200 Other current liabilities 14,700 Revolving bank loan payable 15,100 Total current liabilities 294,500 Long-term liabilities Note payable 141,000 Total liabilities 435,500 Stockholders' equity Common stock 1.250,000 Retained earnings 1867,300 Total stockholders' equity 3117,300 Total liabilities and stockholders equity $3.552,800 302.000 450,000 800,700 40,000 (482,300) 1,110,400 $2,439,800 $128.200 80,400 1.900 15,000 225,500 225,500 1,250,000 964,300 2,214,300 $2,439,800 WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales Less: Cost of goods sold $5,529,500 3,116,700 . $5,529,500 3,116.700 2412800 WATERWAYS CORPORATION INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales Less: Cost of goods sold Gross profit Operating expenses Advertising $50,500 Insurance 398,500 Salanes and wages 586,800 Depreciation 71,300 Other operating expenses 21,300 Total operating expenses Income from operations Other income Gein on sale of equipment 17,900 Other expenses Interest expense (12,300) Net other income and expenses Income before income tax Income tax expense Net income 1,128,400 1,284,400 5,600 1,290.000 387,000 $903,000 (a) Prepare a statement of cash flows using the indirect method for the year 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) WATERWAYS CORPORATION-Installation Division Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to WATERWAYS CORPORATION-Installation Division Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to (c) Determine free cash flow for the year 2020. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Free cash flow If you would like to Show Work for this question Anon Show in