The following are the financial statements of Nosker Company.

The following are the financial statements of Nosker Company.

Nosker Company Comparative Balance Sheets December 31
Assets		2019			2018
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, 2019
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.

 


[Net cash provided by oper. act. = Net inc. + (Depr. exp. - Incr. in accts. rec. - Incr. in inv. + Incr. in accts. pay. - Decr. In inc. tax. pay.)]
Compute free cash flow.
Free cash flow = $31,500 – $0 – $20,000 = $11,500
Here