The comparative balance sheets of Waterway Corporation at the beginning and end of the year 2020 appear below.

WATERWAY CORPORATION BALANCE SHEETS
		Dec. 31, 2020				Jan. 1, 2020				Inc./Dec.
Assets
Cash			$21,140				$14,610			$6,530	Inc.
Accounts receivable			107,140				89,610			17,530	Inc.
Equipment			40,140				23,610			16,530	Inc.
Less: Accumulated Depreciation-Equipment			(17,000	)			(11,000	)		6,000	Inc.
Total			$151,420				$116,830
Liabilities and Stockholders Equity
Accounts payable			$21,140				$16,610			4,530	Inc.
Common stock			101,140				81,610			19,530	Inc.
Retained earnings			29,140				18,610			10,530	Inc.
Total			$151,420				$116,830

Net income of $45,140 was reported, and dividends of $34,610 were paid in 2020. New equipment was purchased and none was sold.

1. Prepare a statement of cash flows for the year 2020.

2.Compute the current ratio (current assets current liabilities) as of January 1, 2020, and December 31, 2020.

3.Compute free cash flow for the year 2020.

4. In light of the analysis in (part b), comment on Waterways liquidity and financial flexibility. 5. Waterway company has (bad/good) liquidity and (good/bad) financial flexibility.