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The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31...

The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 34,050 $ 19,350 Accounts receivable 32,050 20,000 Inventory 26,800 20,100 Equipment 59,550 77,250 Accumulated depreciation—equipment (29,750 ) (24,000 ) Total $122,700 $112,700 Liabilities and Stockholders’ Equity Accounts payable $ 29,000 $ 16,150 Income taxes payable 7,000 8,150 Bonds payable 27,400 32,900 Common stock 17,250 14,650 Retained earnings 42,050 40,850 Total $122,700 $112,700 NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $242,350 Cost of goods sold 176,600 Gross profit 65,750 Operating expenses 24,150 Income from operations 41,600 Interest expense 3,500 Income before income taxes 38,100 Income tax expense 8,800 Net income $ 29,300 Additional data: 1. Dividends declared and paid were $28,100. 2. During the year equipment was sold for $8,350 cash. This equipment cost $17,700 originally and had accumulated depreciation of $9,350 at the time of sale. 3. All depreciation expense, $15,100, is in the operating expenses. 4. All sales and purchases are on account. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) NOSKER COMPANY Statement of Cash Flows $ Adjustments to reconcile net income to $ $

Compute free cash flow.

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Expert Solution

Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income 29300
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation expense 15100
Increase in accounts receivable -12050
Increase in inventory -6700
Increase in accounts payable 12850
Decrease in income taxes payable -1150 8050
Net cash provided by operating activities 37350
Cash flows from investing activities
Sale of equipment 8350
Net cash provided by investing activities 8350
Cash flows from financing activities
Issuance of common stock 2600
Redemption of bonds -5500
Payment of dividends -28100
Net cash used by financing activities -31000
Net increase in cash 14700
Cash at beginning of period 19350
Cash at end of period 34050
b
Net cash provided by operating activities 37350
Less: Capital expenditures 0
Cash dividends 28100 28100
Free Cash Flow 9250

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