Meera Corporation’s comparative balance sheets are presented below.
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MEERA CORPORATION |
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Comparative Balance Sheets |
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December 31 |
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|
2012 |
2011 |
|
|
Cash |
$ 14,300 |
$ 10,700 |
|
Accounts receivable |
21,200 |
23,400 |
|
Land |
20,000 |
26,000 |
|
Buildings |
70,000 |
70,000 |
|
Accumulated depreciation—buildings |
(15,000) |
(10,000) |
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Total |
$110,500 |
$120,100 |
|
Accounts payable |
$ 12,370 |
$ 31,100 |
|
Common stock |
75,000 |
69,000 |
|
Retained earnings |
23,130 |
20,000 |
|
Total |
$110,500 |
$120,100 |
Additional information:
1. Net income was $22,630. Dividends declared and paid were $19,500.
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 $4,900.
Instructions
(a) Prepare a statement of cash flows for 2012 using the indirect method.
(b) Compute free cash flow.