The comparative balance sheets for Royce Company as of December 31 are presented below ROYCE COMPANY COMPARATIVE BALANCE SHEETS December 31 2021 Assets Cash 2020 $ 45,000 $ 81,000 Accounts Receivable 41,000 62,000 Inventory 151,450 142,000 Prepaid expenses 15,280 21,000 Land 105,000 130,000 Buildings 200,000 200,000 Accumulated depreciation - buildings (60,000) (40,000) Equipment 221,000 155,000 (45,000) (35,000) Accumulated depreciation - equipment Total $ 709,730 $ 680,000 Liabilities and Stockholders' Equity Accounts payable $ 47,730 $ 40,000 Bonds payable 300,000 300,000 Common stock, $1 par 160,000 160,000 Retained earnings 202,000 180,000 Total $ 709,730 $ 680,000 Additional information: 1. Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $5,720. 2. Land was sold for cash at book value. 3. Cash dividends of $20,000 were paid. 4. Net income for 2021 was $42,000. 5. Equipment was purchased for $88,000 cash. In addition, equipment costing $22,000 with a book value of $10,000 was sold for $6,000 cash. Instructions a) Prepare a statement of cash flows for the year ended December 31, 2021, using the indirect method. b) Compute the free cash flows.