Rees Corporation's comparative balance sheets are presented below.

Additional information:
1. Net income was $18,300. Dividends declared and paid were $16,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $3,300.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.

Instructions
(a) Prepare a statement of cash flows for 2011 using the indirect method.
(b) Compute free cash flow.

REES CORPORATION Comparative Balance Sheets December 31 2011 2010 Cash Accounts receivable Investments Equipment Accumulated depreciation 15,200 17,700 22,300 16,000 70,000 14,000 10,000) $106,400 16,000 25,200 20,000 60,000 Total Accounts payable Bonds payable Common stock Retained earnings $14,600 11,100 30,000 45,000 29,900 $106,400 $116,000 10,000 50,000 31,800 Total