Comparative financial statement data for Carmono Company follow:

This YearLast YearAssets Cash$ 12.00$ 23.00Accounts receivable68.0061.00Inventory115.00102.60Total current assets195.00186.60Property, plant, and equipment258.00212.00Less accumulated depreciation52.8039.60Net property, plant, and equipment205.20172.40Total assets$ 400.20$ 359.00Liabilities and Stockholders Equity Accounts payable$ 69.00$ 55.00Common stock154.00118.00Retained earnings177.20186.00Total liabilities and stockholders equity$ 400.20$ 359.00

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

Sales$ 1,300.00Cost of goods sold780.00Gross margin520.00Selling and administrative expenses500.00Net 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.