The CF Industries Company has the following comparative balance sheets:

CF Industries Company

Comparative Balance Sheet

Dec. 31, Dec. 31,

2018 2017

Assets

Cash $ 23,000 $10,000

Accounts receivable 18,000 14,000

Inventory 27,000 18,000

Prepaid expense 6,000 9,000

Land 0 18,000

Equipment 60,000 32,000

Accumulated depreciation--equipment (18,000) (14,000)

Total assets $116,000 $87,000

Liabilities and Stockholders' Equity

Accounts payable $ 15,000 $ 2,000

Income tax payable 2,000 5,000

Bonds payable 37,000 47,000

Common stock 40,000 23,000

Retained earnings 22,000 10,000

Total liabilities and stockholders' equity $116,000 $87,000

Additional information:

1. Cash dividends of $12,000 were declared and paid during the year.

2. Land which originally cost $18,000 was sold for $16,000.

3. Common stock was issued at par value for cash.

4. Net income for the year was $24,000.

INSTRUCTIONS

a. Prepare a statement of cash flows for the year ended December 31, 2018, using the indirect method.

b. Compute free cash flow for 2018.