Acc557 Financial Accounting: P13-7A Presented below are the financial statements of Nosker Company

Acc557 Financial Accounting
P13-7A.
Presented below are the financial statements of Nosker Company.
NOSKER COMPANY
Comparative Balance Sheets December 31
Assets 2017 2016
Cash 38,000 20,000
Accounts receivable 30,000 14,000
Inventory 27,000 20,000
Equipment 60,000 78,000
Accumulated depreciation—equipment (29,000) (24,000)
Total $126,000 $108,000

Liabilities and Stockholders' Equity
Accounts payable 24,000 15,000
Income taxes payable 7,000 8,000
Bonds payable 27,000 33,000
Common stock 18,000 14,000
Retained earnings 50,000 38,000
Total $126,000 $108,000

NOSKER COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales revenue 242,000
Cost of goods sold 175,000
Gross profit 67,000
Operating expenses 24,000
Income from operations 43,000
Interest expense 3,000
Income before income taxes 40,000
Income tax expense 8,000
Net income $32,000

Additional data:
1. Dividends declared and paid were $20,000.
2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
3. All depreciation expense, $14,500, is in the operating expenses.
4. All sales and purchases are on account.

Instructions
1. Prepare a statement of cash flows using the indirect method.
2. Compute free cash flow.
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