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.

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 $23,800. The vehicle had been used for 10 years. It cost $80,700 when purchased and had a 10-year life and a $6,100 salvage value. Straight-line depreciation was used. 2. Waterways purchased with cash new equipment costing $209,200. 3. Prepaid expenses increased by $33,900. All changes in accounts payable relate to inventory purchases. WATERWAYS CORPORATION-INSTALLATION DIVISION Balance Sheets December 31 Assets 2020 2019 Current assets Cash $830,400 $749,500 Accounts receivable 674,900 541,100 Work in process 708,600 Inventory 16,700 7,500 Prepaid expenses 76,100 42,200 Total current assets 2,306,700 1,340,300 Property, plant, and equipment Land 297,000 297,000 Buildings 451,000 451,000 Equipment 920,600 792,100 Furnishings 40,200 40,200 Accumulated depreciation (478,600) (485,400) Total property, plant, and equipment 1,230,200 1,094,900 Total assets $3,536,900 $2,435,200 11! $129,200 79,400 2,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Wages payable Interest payable Other current liabilities Revolving bank loan payable Total current liabilities Long-term liabilities Note payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $155,900 101,600 4,600 1,200 14,700 15,200 293,200 15,400 226,000 140,000 433,200 226,000 1,250,000 1,853,700 3,103,700 $3,536,900 1,250,000 959,200 2,209,200 $2,435,200 WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales $5,497,457 Less: Cost of goods sold 3,104,300 Gross profit 2,393,157 Operating expenses Advertising $49,500 Insurance 398,000 Salaries and wages 584,000 Depreciation 67,800 Other operating expenses 21,400 Total operating expenses 1,120,700 Income from operations 1,272,457 Other income Gain on sale of equipment 17,700 Other expenses Interest expense (12,300) Net other income and expenses 5,400 Income before income tax 1,277,857 Income tax expense 383,357 Net income $894,500 (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).) WALATEDNAVARRADALTONEN WATERWAYS CORPORATION-Installation Division Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to > (c) Determine free cash flow for the year 2020. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Free cash flow