Strong Corporation’s comparative balance sheets are presented below.

Additional information:

1. Net income was $28,300. Dividends declared and paid were $26,400.

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

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 2017 using the indirect method.

(b) Compute free cash flow.

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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 2017 $ 28,200 24,200 23,000 60,000 (14,000) $121,400 $ 19,600 10,000 60,000 31,800 $121,400 2016 $ 17,700 22,300 16,000 70,000 (10,000) $116,000 $ 11,100 30,000 45,000 29,900 $116,000