Waterways Continuing Problem 17 (Indirect Method) Waterways prepared the balance sheet and income statement for the irrigation installation division for 2020, Now the company also needs to prepare a statement of cash flows for the same division. The comparative balance sheets for Waterways Corporation's Irrigation Installation Division for the years 2019 and 2020 and the income statement for the year 2020 are presented below. Additional information: 1. Waterways sold a company vehicle for $24,300. The vehicle had been used for 10 years. It cost $80,400 when purchased and had a 10-year life and a $5,900 salvage value. Straight-line depreciation was used. 2. Waterways purchased with cash new equipment costing $207,900. 3. Prepaid expenses increased by $34,400. All changes in accounts payable relate to inventory purchases. WATERWAYS CORPORATION-INSTALLATION DIVISION Balance Sheets Assets 2020 2019 Current assets Cash Accounts recelvable Work in process $740,400 541,900 $833,100D 676,400 705,600 16,700 77,300 2,309,100 7,500 42,900 1,332,700 Prepaid expenses Total current assets Property, plant, and equipment Land Buildings Equipment Furnishin Accumulated depreciation 301,000 446,000 922,200 40,000 301,000 446,000 794,700 40,000 gs (483,600) (483,300) Total property, plant, and equipment 1,225,600 1,098,400 Total assets Liabilities and Stockholders' Equity Current liabilities $3,534,700 $2,431,100 Accounts payable Income taxes payable Wages payable Interest payable Other current liabilities Revolving bank loan payable $156,100 101,000 4,500 1,200 14,500 14,900 292,200 5127,800 80,100 1,900 15,400 Total current liabilities 225,200 Long-term liabilities Note payable 140,000 432,200 Total liabilities 225,200 Stockholders' equity Common stock Retained earnings 1,250,000 1,250,000 955,900 2,205,900 3,534,700 $2,431,100 1,852,500 3,102,500 Total stockholders equity Total liabilities and stockholders' equity WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales Less: Cost of goods sold Gross profit Operating expenses $5,540,557 3,134,200 2,406,357 Advertising Insurance Salaries and wages Depreciation Other operating expenses $49,800 399,800 586,000 74,800 21,300 Total operating expenses Income from operations Other income 1,131,700 1,274,657 Gain on sale of equipment Other expenses 18,400 (12,200) Interest expense Net other income and expenses Income before income tax Income tax expense Net income 6,200 1,280,857 384,257 $896,600 (a) Prepare a statement of cash flows using the indirect method for the year 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) WATERWAYS CORPORATION-Installation Division Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to ( Determine free cash flow for the year 2020 (Enter negative amount using either a negative sign preceding the bere. 45 rparenti eseg ( Free cash flow