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 Corporations 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 $24,000. 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 $209,600. 3. Prepaid expenses increased by $34,200. All changes in accounts payable relate to inventory purchases. WATERWAYS CORPORATIONINSTALLATION DIVISION Balance Sheets December 31 Assets 2020 2019 Current assets Cash $840,700 $739,500 Accounts receivable 676,700 540,100 Work in process 699,600 Inventory 16,700 7,500 Prepaid expenses 76,500 42,300 Total current assets 2,310,200 1,329,400 Property, plant, and equipment Land 302,000 302,000 Buildings 450,000 450,000 Equipment 929,600 800,700 Furnishings 40,000 40,000 Accumulated depreciation (479,000 ) (482,300 ) Total property, plant, and equipment 1,242,600 1,110,400 Total assets $3,552,800 $2,439,800 Liabilities and Stockholders Equity Current liabilities Accounts payable $158,200 $128,200 Income taxes payable 100,800 80,400 Wages payable 4,500 1,900 Interest payable 1,200 Other current liabilities 14,700 15,000 Revolving bank loan payable 15,100 Total current liabilities 294,500 225,500 Long-term liabilities Note payable 141,000 Total liabilities 435,500 225,500 Stockholders equity Common stock 1,250,000 1,250,000 Retained earnings 1,867,300 964,300 Total stockholders equity 3,117,300 2,214,300 Total liabilities and stockholders equity $3,552,800 $2,439,800 WATERWAYS CORPORATIONINSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales $5,529,500 Less: Cost of goods sold 3,116,700 Gross profit 2,412,800 Operating expenses Advertising $50,500 Insurance 398,500 Salaries and wages 586,800 Depreciation 71,300 Other operating expenses 21,300 Total operating expenses 1,128,400 Income from operations 1,284,400 Other income Gain on sale of equipment 17,900 Other expenses Interest expense (12,300 ) Net other income and expenses 5,600 Income before income tax 1,290,000 Income tax expense 387,000 Net income $903,000 (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 CORPORATIONInstallation Division Statement of Cash FlowsIndirect 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 $