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-.SB (LO 2, 4) AP Presented below are the nancial statements of Gaudette Company. Prepare a cash ow state methodand calculate fn GAUDETI'E COMPANY Balance Sheet December 31 Assets 2021 2020 Cash 3 28,000 $ 33,000 Accounts receivable 23,000 14,000 Inventory 41,000 25,000 Equipment 70,000 78,000 Accumulated depreciationequipment (27,000) (24,000) Total $135,000 $126,000 (continued) C HA PT ER 17 The Cash Flow Statement Liabilities and Shareholders\" Equity Accounts payable $ 31,000 $ 43,000 Income taxes payable 26,000 20,000 Notes payable 20,000 10,000 Common shares 25,000 25,000 Retained earnings 33,000 28,000 Total $135 ,000 $126,000 GAUDE'I'I'E COMPANY Income Statement For the Year Ended December 31, 2021 Sales $286,000 Cost of goods sold 194,000 Gross prot 92,000 Selling expenses $28,000 Administrative expenses 9,000 37,000 Prot from operations 55,000 Interest expense 7,000 Prot before income taxes 48,000 Income tax expense 10,000 Prot '5 38,000 Additional information: 1. Dividends of $33,000 were declared and paid. Gaudette reports under ASPE. 2. During the year, equipment was sold for $10,000 cash. This equipment cost $13,000 originally and had a carrying value of $10,000 at the time of sale. 3. All depreciation expense, $6,000, is in the selling expense category. 4. All sales and purchases are on account. 5. Additional equipment was purchased for $5,000 cash. Instructions a. Prepare a statement of cash ows using the indirect method. b. Calculate free cash ow