repare a cash flow statement$$indirect method$$and calculate free cash flow.

P$17\mathrm{.}6$B $($LO $2,4)$ AP Condensed financial data of Wanwright Corp. are shown below. Wanwright reports under ASPE.

WANWRIGHT CORP.Balance SheetDecember $31$

Assets

$2024$

$2023$

Cash

$$92,700$

$$33,400$

Accounts receivable

$70,800$

$37,000$

Inventory

$131,900$

$102,650$

Long$-$term investments

$84,500$

$107,000$

Plant assets

$310,000$

$205,000$

Accumulated depreciation

$(49,500)$

$(40,000)$

$$Total assets

$$640,400$

$$445,050$

Liabilities and Shareholders$$ Equity

Accounts payable

$$62,700$

$$48,280$

Salaries payable

$15,100$

$18,830$

Notes payable

$140,000$

$70,000$

Common shares

$250,000$

$200,000$

Retained earnings

$172,600$

$107,940$

$$Total liabilities and shareholders$$ equity

$$640,400$

$$445,050$

WANWRIGHT CORP.Income StatementFor the Year Ended December $31,2024$

Sales

$$297,500$

Gain on sale of plant assets

$5,000$

$302,500$

Less:

Cost of goods sold

$119,460$

Operating expenses

$14,670$

Depreciation expense

$35,500$

Income tax expense

$27,270$

Interest expense

$2,940$

Total expenses

$199,840$

Profit for the year

$$102,660$

Additional information:

New plant assets costing $$141,000$ were purchased for cash during the year.

Long$-$term investments were sold at cost$.$

Plant assets costing $$36,000$ were sold for $$15,000,$ resulting in a gain of $$5,000.$

A cash dividend of $$38,000$ was declared and paid during the year.

Instructions

Prepare a cash flow statement using the indirect method.

Calculate free cash flow.

Taking It Further If a company has a loss, does that mean that there has also been a net reduction in cash from operating activities? Explain.

Prepare a cash flow statement$$indirect method.