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Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 14.50 $ 28.00 Accounts receivable 78.00 71.00 Inventory 127.50 115.60

Comparative financial statement data for Carmono Company follow:

This Year Last Year
Assets
Cash $ 14.50 $ 28.00
Accounts receivable 78.00 71.00
Inventory 127.50 115.60
Total current assets 220.00 214.60
Property, plant, and equipment 273.00 222.00
Less accumulated depreciation 56.80 42.60
Net property, plant, and equipment 216.20 179.40
Total assets $ 436.20 $ 394.00
Liabilities and Stockholders Equity
Accounts payable $ 76.50 $ 60.00
Common stock 174.00 133.00
Retained earnings 185.70 201.00
Total liabilities and stockholders equity $ 436.20 $ 394.00

For this year, the company reported net income as follows:

Sales $ 1,550.00
Cost of goods sold 930.00
Gross margin 620.00
Selling and administrative expenses 600.00
Net income $ 20.00

This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year.

Required:

1. Using the indirect method, prepare a statement of cash flows for this year.

2. Compute Carmonos free cash flow for this year.

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