Using the informatin above answer and show your work for the following questions:

A. Use the indirect method and compute the net cash provided by operating activities for the year 2014.

B. Prepare a statement of cash flows for the year 2014.

C. compute the the free cash flow for the year 2014 and explain why cash declined so sharply during the year 2014.

El Toro Company Income Statement For the Period January 1, 2014 through December 31, 2014 Sales Cost of Goods Sold Gross Margin Selling and Administrative Expenses Net Operating Income Gain on Sale of Equipment Income Before Taxes Income Taxes Net Income 700,000 400,000 300,000 216,000 84,000 6,000 90,000 27,000 63,000 El Toro Company Comparative Balance Sheets December 31, 2014 December 31, 2013 Assets Cash Accounts Receivable Invento Prepaid Expenses Total Current Assets Plant and Equipment Accumulated Depreciation 11,000 250,000 318,000 7,000 586,000 620,000 165,000 19,000 180,000 270,000 16,000 485,000 500,000 130,000