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London Ltd. released its Year 2020 financial statements. The year 2020 financial statements and other data are reproduced in the following. 2019 London Ltd. Balance sheet ($ million) December 31, Year 2019 and Year 2020 2020 ASSETS Cash and cash equivalents $4784 Accounts receivable 1464 Inventories 4062 Current Assets 10310 Property, plant, and equipment, net 6908 Goodwill 3927 Investments 3260 Total Assets $24405 $80 2065 4154 6299 6582 4052 3665 $20598 LIABILITIES AND STOCKHOLDERS' EQUITY Short-term debt Accounts Payable Accrued liabilities Income taxes payable Dividends payable Current Liabilities Long-term debt Deferred income taxes Stockholders' equity Total liabilities and stockholders' equity $379 1199 3318 1089 260 6335 8222 1719 8219 24405 $1430 791 2277 727 213 5438 6293 2044 6823 20598 London Ltd. Income statement ($ millions) For Year Ending December 31, Year 2020 Sales Cost of goods sold Selling and administrative expenses Depreciation expense Goodwill amortization Interest expense Pretax income Income tax expense Net income Note: Dividends declared, $941 million $31472 (12156) (14410) (654) (125) (670) 3457 (1120) 2337 Required: A. Prepare a statement of cash flows (indirect method) for London Ltd. (15 marks) B. Based on your answer to (A), compute London Ltd.'s free cash flow for Year 2020. Discuss how free cash flow impacts the company's future earnings and financial condition

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