do (b) ONLY pleas

I did (a) already down below

P13-6C Presented below are the financial statements of Jang Company. JANG COMPANY Comparative Balance Sheets December 31 2011 Assets Cash $ 24,000 25,000 Accounts receivable Merchandise inventory 41,000 $ 69,000 Property, plant, and equipment Less: Accumulated depreciation Total 43,000 $133.000 Liabilities and Stockholders' Equity Accounts payable $ 30,000 Income taxes payable 25,000 Bonds payable 20,000 Common stock 25,000 Retained earnings 33,000 Total $133,000 (26,000) $ 78,000 (24,000) 2010 33,000 14,000 25,000 54,000 $126.000 $ 43,000 20,000 10,000 25,000 28,000 $126,000 JANG COMPANY Income Statement For the Year Ended December 31, 2011 $28,000 9,000 Sales $281,000 Cost of goods sold 204,000 77,000 Gross profit Selling expenses Administrative expenses 37,000 Income from operations 40,000 Interest expense 5,000 Income before income taxes 35,000 10,000 Income tax expense Net income $ 25,000 Additional data: 1. Dividends of $20,000 were declared and paid. 2. During the year equipment was sold for $12,000 cash. This equipment cost $15,000 originally and had a book value of $12,000 at the time of sale. 3. All depreciation expense, $5,000, is in the selling expense category. 4. All sales and purchases are on account. 5. Additional equipment was purchased for $6,000 cash. Instructions (a) Prepare a statement of cash flows using the indirect method. (b) Compute free cash flow. SUMMARY OF CONVERSION TO NET CASH PROVIDED BY OPERATING ACTIVITIES - INDIRECT METHOD Adjustments Required to Convert Net Income to Net Cash Provided by Operating Activities Add Noncash Depreciation expense Patent amortization expense Depletion expense Add Charges Add Add Gains and Losses Loss on disposal of plant assets Gain on disposal of plant assets Deduct Deduct Changes in Current Assets Increase in current asset account Decrease in current asset account Increase in current liability account Current Liabilities [ Decrease in current liability account Add Add and Deduct o (a) Cash Flow Statement (using Indirect method): ROCASTLE COMPANY Statement of Cash Flows For the Year Ended December 31,2012 Cash Flows from Operating Activities: Net Income Adjustments to reconcile net Income to Net cash provided by Operating Activities Depreciation Expense $8,000 Increase in Accounts Receivable ($11,000) Increase in Inventory ($16,000) Decrease in Accounts Payable ($12,000) Increase in Income Tax Payable Net cash provided by Operating Activities Cash Flows from Investing Activities: Sale of Equipment Purchase of Equipment Net Cash provided by Investing Activities Cash Flows from Financing Activities: Payment of Dividends Issuance of Bonds Payable Net cash used by Financing activities Net decrease in cash Cash at beginning of period Cash at end of period (b) Free cash Flow: Net cash provided by Operating Activities $1,000 Less: Capital Expenditures ($7,000) Cash Dividends ($23,000) Free cash Flow ($29,000) **Note: Amounts in Brackets have negative balance. $28,000 $4,000 ($27,000) $1,000 $10,000 ($7,000) $3,000 ($23,000) $10,000 ($13,000) ($9,000) $33,000 $24,000