Presented below are the financial statements of Rocastle Company.

Additional data:
1. Depreciation expense was $6,000.
2. Dividends of $25,000 were declared and paid.
3. During the year, equipment was sold for $12,000 cash. This equipment cost $15,000 originally and had accumulated depreciation of $3,000 at the time of sale.
4. Additional equipment was purchased for $7,000 cash.
Instructions
(a) Prepare a statement of cash flows using the indirect method.
(b) Compute free cashflow.

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Rocastle Company Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Equipment Less: Accumulated depreciation- 2014 18,000 25,000 45,000 2013 33,000 14,000 25,000 70,000 $78,000 (27,000 43,000 54,000 $126,000 equipment (24.000) Total $131,000 Liabilities and Stockholders' Equit Accounts pavable Income taxes payable Bonds payable Common stock Retained earnings 31,000 24,000 20,000 25,000 31,000 43,000 20,000 10,000 25,000 28,000 $126,000 Total Rocastle Company Income Statement For the Year Ended December 31, 2014 Sales revenue Cost of goods sold Gross proft Operating expenses Income from operations Interest expense Income before income taxes Income tax expense Net income $286,000 204,000 82,000 37,000 45,000 7,000 38,000 10,000 $28,000