Strong Corporation's comparative balance sheets are as follows.
Additional information:

1. Net income was \(\$ 28,300\). Dividends declared and paid were \(\$ 26,400\). Depreciation expense was \(\$ 5,200\).

2. Equipment which cost \(\$ 10,000\) and had accumulated depreciation of \(\$ 1,200\) was sold for \(\$ 4,300\).

3. All other changes in noncurrent accounts had a direct effect on cash flows, except the change in accumulated depreciation.

Instructions

a. Prepare a statement of cash flows for 2025 using the indirect method.

b. Compute free cash flow.

Transcribed Image Text:

Strong Corporation Comparative Balance Sheets December 31 Cash Accounts receivable Investments Equipment Accumulated depreciation-equipment Total Accounts payable Bonds payable Common stock Retained earnings Total 2025 $ 28,200 24,200 23,000 60,000 (14,000) $121,400 $ 19,600 10,000 60,000 31,800 $121,400 2024 $ 17,700 22,300 16,000 70,000 (10,000) $116,000 $ 11,100 30,000 45,000 29,900 $116,000