Mary Walker, president of Rusco Company, considers $35,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $30,000 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 $ 30,000 241,000 263,500 17,500 552,000 135,000 890,000 217,500 672,500 $1,359,500 $ 51,000 229,500 205,000 33,000 518,500 195,000 765,000 194,500 570,500 $1,284,000 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 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 $ 246,500 9,500 54,000 310,000 245,000 555,000 $ 178,000 18.000 46,500 242,500 130,000 372,500 717,500 87,000 804,500 $1,359,500 675,000 236,500 911,500 $1,284,000 Rusco Company Income Statement For This Year Ended July 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income $1,100,000 687,500 412,500 294,250 118,250 $27,500 (9,000) 18,500 136,750 40,950 95,800 $ 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 $56,000. The equipment originally cost $120,000 and had accumulated depreciation of $55,000. c. Long-term investments that cost $60,000 were sold during the year for $87,500. 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.) Rusco Company Statement of Cash FlowsIndirect 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: 0 Financing activities: 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents $ 0 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