The financial statements of BW Company appear below. BW COMPANY Comparative Balance Sheets December 31, 2020 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Land Equipment Less: Accumulated depreciation Total 2020 23,000 24,000 20,000 15,000 40,000 210,000 (55,000) 277,000 2019 $ 11,000 33,000 29,000 13,000 40,000 225,000 (67,500) $ 283,500 2013 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Interest payable Income taxes payable Bonds payable Common stock 2014 9,000 9,500 1,000 3,000 50.000 125,000 18,500 7,500 1,500 2,000 80,000 105,000 69 000 LLLLLLLLLL repaid expenses and Equipment Less: Accumulated depreciation "Total 15,000 40,000 210,000 (55,000) $ 277,000 13,000 40,000 225,000 (67,500) $ 283,500 2014 9,000 9.500 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Interest payable Income taxes payable Bonds payable Common stock Retained eamings Total 1,000 3,000 50,000 125,000 79,500 277,000 2013 18,500 7,500 1,500 2,000 80,000 105,000 69,000 283.500 Eng United States iesp ENG 3 Retained eamings Total 79,500 277,000 69,000 283,500 - BW COMPANY Income Statement For the Year Ended December 31, 2020 $ 600,000 2,500 602,500 Revenues Sales Gain on sale of plant assets Less: Expenses Cost of goods sold Operating expenses (including depreciation) Interest expense Income tax expense Net income 500,000 67,500 5,000 9,000 $ 21.000 Page 7 of 8 Page 7 of 8 1596 words English (United States) ENE Additional information: 1. Plant assets (which have an original cost of $55,000 and accumulated depreciation of $20,000) were sold at a sales price of $37.500. 2. Additional equipment was purchased at a cost of $40,000. 3. Dividends of $10,500 were paid. 4. Bonds were redeemed at face value. 5. Additional shares of stock were issued for cash. Instruction: 1. Prepare a complete statement of cash flows for BW Company for the year ended December 31, 2020, using indirect method. (11 marks) 2. Compute free cash flows. (2 marks)