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 Assets Current assets: at July 31 This Year Last Year Cash Accounts Receivable Inventory Prepaid expenses Total current assets Long-term investments Plant and equipment Less accumulated depreciation Net plant and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds Payable Total liabilities Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 45,000 $ 69,000 262,000 277,000 249,000 214,000 28,000 51,000 612,000 583,000 180,000 270,000 920,000 780,000 225,000 199,000 695,000 581,000 $ 1,487,000 $ 1,434,000 $ 181,000 $ 263,000 11,000 21,000 66,000 54,000 340,000 256,000 290,000 160,000 630,000 416,000 830,000 750,000 27,000 857,000 $ 1,487,000 268,000 1,018,000 $ 1,434,000 Rusco Company Income Statement Selling and administrative expenses For This Year Ended July 31 Sales $ 1,400,000 Cost of goods sold 875,000 Gross margin 525,000 374,500 150,500 $ 35,000 (12,000) 23,000 173,500 51,900 Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income The following additional information is available for this year. $ 121,600 The following additional information is available for this year. a. The company declared and paid a cash dividend. b. Equipment was sold during the year for $68,000. The equipment originally cost $150,000 and had accumulated depreciation of $70,000. c. Long-term investments that cost $90,000 were sold during the year for $125,000. d. The company did not retire any bonds payable or repurchase any of its common stock. Required: 1. Using the indirect method, compute the net cash provided by/used in operating activities for this year. 2. Prepare a statement of cash flows for this year. 3. Compute free cash flow for this year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the indirect method, compute the net cash provided by/used in operating activities for this year. (List any deduction in cash and cash outflows as negative amounts.) Rusco Company Statement of Cash Flows-Indirect Method (partial) 0 $ 0 Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) Rusco Company Statement of Cash Flows For This Year Ended July 31 Operating activities: Investing activities: Financing activities: Beginning cash and cash equivalents Ending cash and cash equivalents 0 0 0 $ 0 < Required 1 Required 3 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute free cash flow for this year. (Negative amount should be indicated by a minus sign.) Free cash flow < Required 2 Required 3 >