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Complete Please Mary Walker, president of Rusco Company, considers $38,000 to be the minimum cash balance for operating purposes. As can be seen from the

Complete Please

Mary Walker, president of Rusco Company, considers $38,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $33,000in cash was available at the end of 2014. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker.

Rusco Company Comparative Balance Sheet July 31, 2014 and 2013
2014 2013
Assets
Current assets:
Cash $ 33,000 $ 54,600
Accounts Receivable 221,600 233,400
Inventory 266,200 206,800
Prepaid expenses 19,600 36,600

Total current assets 540,400 531,400

Long-term investments 144,000 210,000

Plant and equipment 896,000 768,000
Less accumulated depreciation 219,000 195,400

Net plant and equipment 677,000 572,600

Total assets $ 1,361,400 $ 1,314,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 191,200 $ 249,800
Accrued liabilities 9,800 18,600
Income taxes payable 56,400 48,000

Total current liabilities 257,400 316,400
Bonds Payable 254,000 136,000

Total liabilities 511,400 452,400

Stockholders equity:
Common stock 640,000 690,000
Retained earnings 210,000 171,600

Total stockholders' equity 850,000 861,600

Total liabilities and stockholders' equity $ 1,361,400 $ 1,314,000

Rusco Company Income Statement For the Year Ended July 31, 2014
Sales $ 1,160,000
Cost of goods sold 725,000

Gross margin 435,000
Selling and administrative expenses 310,300

Net operating income 124,700
Nonoperating items:
Gain on sale of investments $29,000
Loss on sale of equipment (9,600) 19,400

Income before taxes 144,100
Income taxes 43,140

Net income $ 100,960

The following additional information is available for the year 2014.
a. The company declared and paid a cash dividend.
b. Equipment was sold during the year for $58,400. The equipment had originally cost $126,000 and had accumulated depreciation of $58,000.
c. Long-term investments that had cost $66,000 were sold during the year for $95,000.
d.

The company did not retire any bonds payable or repurchase any of its common stock.

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2.

Prepare a statement of cash flows for 2014. (List any deduction in cash and cash outflows as negative amounts.)

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Required: 1. Using the indirect method, compute the net cash for operating activities for 2014. (Negative amount should be indicated by a minus sign Net cash used in operating activities

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