Statement of Cash Flows (Direct Method) The Artic Companys income statement and comparative balance sheets at December 31 of the current and previous year are shown below: ARTIC COMPANY Income Statement For the Year Ended December 31 Sales Revenue $645,000 Cost of Goods Sold $430,000 Wages Expense 91,000 Insurance Expense 12,000 Depreciation Expense 13,000 Interest Expense 15,000 Income Tax Expense 29,000 590,000 Net Income $55,000 ARTIC COMPANY Balance Sheets Dec. 31, Current Year Dec. 31, Previous Year Assets Cash $41,000 $8,000 Accounts Receivable 41,000 32,000 Inventory 90,000 65,000 Prepaid Insurance 5,000 7,000 Plant Assets 219,000 202,000 Accumulated Depreciation (68,000) (55,000) Total Assets $328,000 $259,000 Liabilities and Stockholders Equity Accounts Payable $7,000 $10,000 Wages Payable 10,000 6,000 Income Tax Payable 6,000 7,000 Bonds Payable 141,000 87,000 Common Stock 90,000 90,000 Retained Earnings 74,000 59,000 Total Liabilities and Stockholders Equity $328,000 $259,000 Cash dividends of $40,000 were declared and paid during the current year. Plant assets were purchased for cash and bonds payable were issued for cash. Bond interest is paid semiannually on June 30 and December 31. Accounts payable relate to merchandise purchases. Required a. Calculate the change in cash that occurred during the current year. b. Prepare a statement of cash flows using the direct method. c. Compute free cash flow. d. Compute the operatingcashflowtocurrentliabilities ratio. e. Compute the operatingcashflowtocapitalexpenditures ratio