The three accounts shown below appear in the general ledger of Herrick Corp. during 2017.

Equipment
Date?????			Debit	Credit	Balance
Jan.	1	Balance			160,000
July	31	Purchase of equipment	70,000		230,000
Sept.	2	Cost of equipment constructed	53,000		283,000
Nov.	10	Cost of equipment sold		49,000	234,000
Accumulated DepreciationEquipment
Date?????			Debit	Credit	Balance
Jan.	1	Balance			71,000
Nov.	10	Accumulated depreciation on equipment sold	30,000		41,000
Dec.	31	Depreciation for year		28,000	69,000
Retained Earnings
Date?????			Debit	Credit	Balance
Jan.	1	Balance			105,000
Aug.	23	Dividends (cash)	14,000		91,000
Dec.	31	Net income		77,000	168,000

Instructions

From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of equipment was $7,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)

Prepare statement of cash flows and compute free cash flow.