Mary Walker, president of Rusco Company, considers $27,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $22,000 in cash was available at the end of this year. Because 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 at July 31 Assets Current assets: This Year Last Year Cash and cash equivalents 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 $ 22,000 $ 41,400 229,800 219,100 200,200 256,300 11,900 23,400 520,000 484,100 111,000 155,000 874,000 757,000 213,500 192,100 660,500 564,900 $ 1,204,000 $ 1,291,500 $ 237,700 8,700 $ 176,400 16,400 47,600 42,500 294,000 235,300 221,000 114,000 515,000 349,300 657,500 635,000 119,000 219,700 776,500 854,700 $ 1,291,500 $ 1,204,000 Rusco Company Income Statement Selling and administrative expenses Net operating income For This Year Ended July 31 Sales $ 940,000 Cost of goods sold 587,500 Gross margin 352,500 251,450 101,050 $ 23,500 (7,400) 16,100 117,150 35,110 $ 82,040 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. a. The company paid a cash dividend. b. Equipment costing $104,000 with accumulated depreciation of $47,000 was sold for $49,600. c. Long-term investments costing $44,000 were sold for $67,500. d. The company did not retire any bonds payable or repurchase any of its common stock. Required: For this year: 1. Determine the net cash provided by (used in) operating activities using the indirect method. 2. Prepare a statement of cash flows. 3. Compute free cash flow. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the net cash provided by (used in) operating activities using the indirect method for this year. Note: Cash outflows and amounts to be deducted should be indicated with a minus sign. Rusco Company Statement of Cash Flows-Indirect Method (partial) < Required 1 Required 2 > Required: For this year: 1. Determine the net cash provided by (used in) operating activities using the indirect method. 2. Prepare a statement of cash flows. 3. Compute free cash flow. 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. Note: Cash outflows and amounts to be deducted should be indicated with a minus sign. 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 < Required 1 Required 3 > For this year: 1. Determine the net cash provided by (used in) operating activities using the indirect method. 2. Prepare a statement of cash flows. 3. Compute free cash flow. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute free cash flow for this year. Note: Negative amount should be indicated by a minus sign. Free cash flow < Required 2 Required 3 >