Reference no: EM132547786
The following are the financial statements of Sheffield Corp..
Sheffield Corp. Comparative Balance Sheets
December 31
Assets
2020 2019
Cash $37,400 $19,100
Accounts receivable 32,000 19,700
Inventory 29,600 20,100
Equipment 59,600 78,000
Accumulated depreciation-equipment (29,600) (23,500)
Total $129,000 $113,400
Liabilities and Stockholders' Equity
Accounts payable $28,100 $16,000
Income taxes payable 7,000 8,100
Bonds payable 27,400 32,200
Common stock 18,300 13,300
Retained earnings 48,200 43,800
Total $129,000 $113,400
Sheffield Corp.
Income Statement
For the Year Ended December 31, 2020
Sales revenue$242,400
Cost of goods sold176,800
Gross profit65,600
Operating expenses23,400
Income from operations42,200
Interest expense3,000
Income before income taxes39,200
Income tax expense9,000
Net income$30,200
Additional data:
1. Dividends declared and paid were $25,800.
2. During the year, equipment was sold for $9,800 cash. This equipment cost $18,400 originally and had a book value of $9,800 at the time of sale.
3. All depreciation expense, $14,700, is in the operating expenses.
4. All sales and purchases are on account.
Question 1: Prepare statement of cash flows using the indirect method.
Question 2: Compute free cash flow.