Mary Walker, president of Rusco Company, considers $31,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $26,000in cash was available at the end of 2014. 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 July 31, 2014 and 2013
	2014		2013
Assets
Current assets:
Cash	$	26,000	$	46,200
Accounts Receivable		213,200		224,300
Inventory		259,900		202,600
Prepaid expenses		14,700		28,200
Total current assets		513,800		501,300
Long-term investments		123,000		175,000
Plant and equipment		882,000		761,000
Less accumulated depreciation		215,500		193,300
Net plant and equipment		666,500		567,700
Total assets	$	1,303,300	$	1,244,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	184,900	$	242,100
Accrued liabilities		9,100		17,200
Income taxes payable		50,800		44,500
Total current liabilities		244,800		303,800
Bonds Payable		233,000		122,000
Total liabilities		477,800		425,800
Stockholders equity:
Common stock		622,500		655,000
Retained earnings		203,000		163,200
Total stockholders' equity		825,500		818,200
Total liabilities and stockholders' equity	$	1,303,300	$	1,244,000

Rusco Company Income Statement For the Year Ended July 31, 2014
Sales		$	1,020,000
Cost of goods sold			637,500
Gross margin			382,500
Selling and administrative expenses			272,850
Net operating income			109,650
Nonoperating items:
Gain on sale of investments	$25,500
Loss on sale of equipment	(8,200)		17,300
Income before taxes			126,950
Income taxes			38,030
Net income		$	88,920

The following additional information is available for the year 2014.

a.	The company declared and paid a cash dividend.
b.	Equipment was sold during the year for $52,800. The equipment had originally cost $112,000 and had accumulated depreciation of $51,000.
c.	Long-term investments that had cost $52,000 were sold during the year for $77,500.
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 for operating activities for 2014. (Negative amount should be indicated by a minus sign.)

2.	Prepare a statement of cash flows for 2014. (List any deduction in cash and cash outflows as negative amounts.)

3.	Compute free cash flow for 2014. (Negative amount should be indicated by a minus sign.)