Question: Question 1. Gushi Corporation's comparative balance sheets are presented below. GUSHI CORPORATION Comparative Balance Sheets December 31 2020 2019 Cash $ 21,570 $ 10,700 Accounts
Question 1.
Gushi Corporation's comparative balance sheets are presented below.
GUSHI CORPORATION
Comparative Balance Sheets
December 31
2020 2019
Cash $ 21,570 $ 10,700
Accounts receivable 18,200 23,400
Land 18,000 26,000
Building 70,000 70,000
Accumulated depreciation (15,000) (10,000)
Total $112,770 $120,100
Accounts payable $ 12,370 $31,100
Common stock 75,000 69,000
Retained earnings 25,400 20,000
Total $112,770 $120,100
Additional information:
1. Net income was $27,900. Dividends declared and paid were $22,500.
2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $5,900.
Instruction
(a) Prepare a statement of cash flows for 2020 using the indirect method.
(b) Compute free cash flow.
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