Mary Walker, president of Rusco Company, considers $34,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $29,000in 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	$	29,000	$	49,800
Accounts Receivable		216,800		228,200
Inventory		262,600		204,400
Prepaid expenses		16,800		31,800
Total current assets		525,200		514,200
Long-term investments		132,000		190,000
Plant and equipment		888,000		764,000
Less accumulated depreciation		217,000		194,200
Net plant and equipment		671,000		569,800
Total assets	$	1,328,200	$	1,274,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	187,600	$	245,400
Accrued liabilities		9,400		17,800
Income taxes payable		53,200		46,000
Total current liabilities		250,200		309,200
Bonds Payable		242,000		128,000
Total liabilities		492,200		437,200
Stockholders equity:
Common stock		630,000		670,000
Retained earnings		206,000		166,800
Total stockholders' equity		836,000		836,800
Total liabilities and stockholders' equity	$	1,328,200	$	1,274,000

Rusco Company Income Statement For the Year Ended July 31, 2014
Sales		$	1,080,000
Cost of goods sold			675,000
Gross margin			405,000
Selling and administrative expenses			288,900
Net operating income			116,100
Nonoperating items:
Gain on sale of investments	$27,000
Loss on sale of equipment	(8,800)		18,200
Income before taxes			134,300
Income taxes			40,220
Net income		$	94,080

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 $55,200. The equipment had originally cost $118,000 and had accumulated depreciation of $54,000.
c.	Long-term investments that had cost $58,000 were sold during the year for $85,000.
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 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.)