*P14-8B Data for Molina Company are presented in P14-7B. Further analysis reveals the

Price: $2.50



Presented below are the financial statements of Molina Company.

1. Dividends of $33,000 were declared and paid.Additional data:
2. During the year equipment was sold for $10,000 cash.This equipment cost $13,000 originally
and had a book value of $10,000 at the time of sale.
3. All depreciation expense, $6,000, is in the selling expense category.
4. All sales and purchases are on account.
5. Additional equipment was purchased for $5,000 cash.

Further analysis reveals the following.
1. Accounts payable pertains to merchandise creditors.
2. All operating expenses except for depreciation are paid in cash.

Instructions
(a) Prepare a statement of cash flows using the direct method.
(b) Compute free cash flow.