The three accounts shown below appear in the general ledger of Herrick Corp. during 2017

Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of equipment was $7,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)
Prepare statement of cash flows and compute free cash flow.

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Equipment 1Balance 31 Purchase of equipment 2 Cost of equipment constructed 0Cost of equipment sold Debit Credit Balance 160,000 230,000 283,000 49,000 234,000 70,000 53,000 pment 1 Balance 10 Accumulated depreciation on equipment sold 31 Depreciation for year Debit Credit Balance 71,000 41,000 28,000 69,000 Jan 30,000 Retained Earnings 1 Balance 23 Dividends (cash) 31 Net income Debit Credit Balance 105,000 91,000 77,000 168,000 14,000