Exercise 12-6 Prepare a Statement of Cash Flows; Free Cash Flow [LO12-1, LO12-2, LO12-3]

Comparative financial statement data for Carmono Company follow:

	This Year		Last Year
Assets
Cash	$	7.50	$	14.00
Accounts receivable		50.00		43.00
Inventory		92.50		79.20
Total current assets		150.00		136.20
Property, plant, and equipment		231.00		194.00
Less accumulated depreciation		45.60		34.20
Net property, plant, and equipment		185.40		159.80
Total assets	$	335.40	$	296.00
Liabilities and Stockholders Equity
Accounts payable	$	55.50	$	46.00
Common stock		118.00		91.00
Retained earnings		161.90		159.00
Total liabilities and stockholders equity	$	335.40	$	296.00

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

Sales	$	850.00
Cost of goods sold		510.00
Gross margin		340.00
Selling and administrative expenses		320.00
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. (List any deduction in cash and cash outflows as negative amounts. Round your intermediate calculations and final answers to 2 decimal places.)

2.	Compute Carmonos free cash flow for this year. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to 2 decimal places.)