STATEMENT OF CASH FLOWS P13-60 Presented below are the financial statements of Jang Company JANG COMPANY Comparative Balance Sheets December 31 Assets 2011 Cash $ 24,000 Accounts receivable 25,000 Merchandise inventory 41,000 Property, plant, and equipment $69.000 Less: Accumulated depreciation (26,000 43,000 Total $133.000 2010 $ 33.000 14,000 25.000 $ 78,000 (24,000) 54,000 $126.000 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $ 30,000 25.000 20.000 25,000 33.000 $133.000 $ 43,000 20.000 10,000 25.000 28,000 $126,000 JANG COMPANY Income Statement For the Year Ended December 31, 2011 Sales $281.000 Cost of goods sold 204,000 Gross profit 77.000 Selling expenses $28.000 Administrative expenses 9.000 37,000 Income from operations 40,000 Interestepense 5.000 Income before income taxe 35.000 Income tax expense 10,000 Net Income $ 25,000 Additional data 1. Dividends of $20,000 were declared and paid 2. During the year equipment was sold for $12.000 cash. This equipment cost $15.000 originally and had a book value of $12.000 at the time of sale 3. All depreciation expense, $5.000, is in the selling expertise category 4. All sales and purchases are on account 5. Additional equipment was purchased for $6.000 cash Instructions Prepare a statement of cash flows using the Indirect method (b) Compute free cash flow