Exercise 14-6 Prepare a Statement of Cash Flows; Free Cash Flow [LO14-1, LO14-2, LO14-3]

Comparative financial statement data for Carmono Company follow:

	This Year		Last Year
Assets
Cash	$	11.50	$	22.00
Accounts receivable		66.00		59.00
Inventory		112.50		100.00
Total current assets		190.00		181.00
Property, plant, and equipment		255.00		210.00
Less accumulated depreciation		52.00		39.00
Net property, plant, and equipment		203.00		171.00
Total assets	$	393.00	$	352.00
Liabilities and Stockholders Equity
Accounts payable	$	67.50	$	54.00
Common stock		150.00		115.00
Retained earnings		175.50		183.00
Total liabilities and stockholders equity	$	393.00	$	352.00

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

Sales	$	1,250.00
Cost of goods sold		750.00
Gross margin		500.00
Selling and administrative expenses		480.00
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.)