No credit will be provided for work not shown-correct or not! 1. PAP Inc.'s financial statements are as follows: PAP Inc. Balance sheet For the Period ended 2016 and 2017 (5000) ASSETS 2016 2017 Cash 5.200 5.150 Accounts receivable 450 425 Inventory 625 CURRENT ASSETS $ 1.200 $ 1.200 Plant & equipment $2,200 $2,600 Less Accumulated (1.000) (1.200) Depreciation Net Plant & equipment $1.200 $1.400 Total Assets $2.400 $2.600 LIABILITIES & Owner's Equity Accounts payable $150 Notes Payable current 0 150 (9%) CURRENT LIABILITIES $ 200 $300 Bonds $ 600 $600 Owner's Equity Common stock 9900 5900 Retained earnings 700 800 Total Owner's Equity $ 1.600 $1,700 Total liabilities & Equity $2.400 $2.600 $ 200 PAP Inc. Income Statements 1000's) 2016 2017 Sales $1,200 $1.450 COGS 700 850 Gross Profit $500 $600 Selling, general 30 40 ADM Expenses Depreciation 220 200 Operating $ 250 5 360 Income Interest expense 50 64 EBT $200 $ 295 Taxes (40%) Net income $120 $178 (10 pts) Using the financial statements above, Calculate PAP Inc.'s free cash flows from operation for year ending in 2017