Mary Walker, president of Rusco Company, considers $29,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $24,000 in cash was available at the end of this year. 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 at July 31 This Year Last Year $ 24,000 232,600 258.100 13,300 528,000 117.000 878,000 214,500 663,500 $1,308,500 S 43,800 221.700 201,400 25.800 492.700 165,000 759.000 192.700 566.300 $1,224.000 Assets Current assets 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 Habilities and stockholders' equity $ 239,900 8,900 49,200 298.000 227,000 525,000 $ 176.800 16.800 43.500 237.100 118.000 355.100 672.500 111,000 783,500 $1.308,500 645.000 223.900 868.900 $1,224.000 Rusco Company Income Statement For This Year Ended July 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nanoperating items. Gain on sale of investments $24,500 Loss on sale of equipment (7,800) Income before taxes Income taxes Net income $980,000 612.500 367,500 262,150 105,350 16,700 122,050 36,570 $ 85,480 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 $51,200. The equipment originally cost $108,000 and had accumulated depreciation of $49,000. c. Long-term investments that cost $48,000 were sold during the year for $72,500. 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.) Show less Rusco Company Statement of Cash Flows-Indirect Method (partial) 0 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 0 Financing activities 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents 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
